DeAWM lists LSE’s first DAX ETF

Aug 27th, 2013 | By | Category: Equities

Deutsche Asset & Wealth Management (DeAWM), the asset management division of Deutsche Bank, has launched the London Stock Exchange’s first exchange-traded fund (ETF) to be based on the DAX Index.

DeAWM lists LSE’s first DAX ETF

Deutsche Asset & Wealth Management has launched the London Stock Exchange’s first exchange-traded fund to be based on the DAX Index.

While numerous DAX-linked ETFs are listed around the world, the db x-trackers DAX UCITS ETF (DR) (XDDX) is the first to be available locally to UK-based investors.

The fact that this is the first such ETF on the LSE may come as a surprise to many given the profile of the blue-chip DAX index – widely seen as Germany’s equity benchmark index.

The index measures the performance of the 30 largest companies in terms of order book volume and market capitalisation on the Frankfurt Stock Exchange. It represents around 80% of the market capital authorised in Germany.

Major holdings include healthcare and materials multinational Bayer, engineering and electronics conglomerate Siemens, chemical giant BASF, Mercedes-Benz owner Daimler and enterprise software developer SAP. Other well-known names include Volkswagen, BMW, E.ON, Adidas and Continental.

DAX-based ETFs are exceptionally popular in the domestic German market where they are among the largest and most actively traded ETFs. Indeed, DeAWM’s existing Deutsche Börse-listed db X-trackers DAX UCITS ETF (XDAX), which is swap based, has more than €7.25 billion in assets under management, making it one of Europe’s largest ETFs.

The Deutsche Börse-listed iShares DAX ETF (DE) (EXS1) is the largest DAX ETF with €14.74 billion in assets.

Gillian Walmsley, Head of Fixed Income and Exchange Traded Products (ETPs) at the London Stock Exchange, said: “This is an exciting day for ETF investors in the UK. Private investors in particular have until now been unable to get direct exposure to the DAX index via a London-listed ETF. This new ETF will give them access to some of the world’s leading companies and brands. This first DAX ETF is testament to London’s continuing ability to offer the widest diversity of products and investor access to overseas markets.”

Manooj Mistry, Deutsche Asset & Wealth Management’s Head of Exchange Traded Products, EMEA, added: “We’re seeing demand from investors for German equity exposure on the back of the positive performance of the German economy. Our db x-trackers DAX UCITS ETF (DR) has a total expense ratio of 0.15% and efficiently replicates the index directly. It should appeal to a wide range of investors.”

The fund trades in Sterling and is fully physically backed, directly replicating the performance of the index by purchasing actual underlying securities at their index weights. It has UK reporting fund status and is eligible for ISAs and SIPPs.

Although the new fund is the first conventional delta one ETF based on the DAX, UK-based investor have since December 2012 been able to get leveraged and inverse exposure to the index via ETPs issued by London-based short and leveraged specialist Boost, namely the Boost LevDAX 3x Daily ETP (3DEL) and Boost ShortDAX 3x Daily ETP (3DES).

For broader German equity exposure, investors could consider the Amundi ETF MSCI Germany (CG1), which is linked to the MSCI Germany Index.

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