Deka unveils Nasdaq 100 ETF

Oct 19th, 2023 | By | Category: Equities

German investment giant Deka has launched a new passive ETF in Europe tracking the Nasdaq 100.

Deka unveils Nasdaq 100 ETF

Deka has introduced a cost-competitive Nasdaq 100 ETF in Europe.

The Deka Nasdaq 100 UCITS ETF (D6RH GY) has been listed on Deutsche Börse Xetra with an expense ratio of 0.25%.

The Nasdaq 100 is the world’s pre-eminent benchmark for the performance of growth-oriented stocks, serving as the underlying reference for numerous financial products that collectively house many hundreds of billions of dollars in AUM.

The index consists of 100 of the largest US and international non-financial companies by market capitalization listed on Nasdaq. It includes companies across major industry groups including computer hardware and software, communications, retail/wholesale trade, and biotechnology.

In the already crowded landscape of Nasdaq 100 funds, D6RH stands out for its competitive pricing, although it is not the least expensive option available. It notably undercuts the market leaders – the $10.4 billion iShares Nasdaq 100 UCITS ETF (CNDX LN) and the $7.0bn Invesco EQQQ Nasdaq 100 UCITS ETF (EQQQ LN) – which have expense ratios of 0.33% and 0.30%, respectively.

The most cost-effective offering in this category is the AXA IM Nasdaq 100 UCITS ETF (ANAU GY), which boasts the lowest expense ratio on the market at just 0.14%.

Earlier this year, ETFs that are linked to the Nasdaq 100 underwent significant changes due to an exceptional rebalancing of the index, a measure designed to mitigate the excessive influence of the index’s largest constituents. According to the index’s guidelines, Nasdaq will intervene when the combined weight of all stocks individually weighing over 4.5% exceeds 48%, a threshold crossed this year in the wake of a resurgent ‘tech trade’ fuelled by the Federal Reserve’s more lenient stance on interest rates.

For investors concerned about the Nasdaq 100’s heavy tilt towards its largest constituents, Invesco launched a pioneering solution in Europe this past July. Debuting with a modest expense ratio of 0.20%, the Invesco Nasdaq-100 Equal Weight UCITS ETF (IEWQ LN) provides evenly distributed exposure to the index’s components, rebalanced on a quarterly basis.

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