Deutsche AM’s db X-trackers ETF platform adds $28bn in net new assets in 2015

Feb 3rd, 2016 | By | Category: ETF and Index News

Deutsche Asset Management (Deutsche AM), a division of Frankfurt-headquartered Deutsche Bank, has announced that its db x-trackers exchange-traded fund platform captured $27.8bn in net inflows during 2015, equivalent to 8% of the global total, making it the third highest recipient of net inflows of any ETF provider globally and the fifth largest by assets under management.

According to the firm, inflows were driven by increasing ETF usage among institutional investors, the rising popularity of fixed income ETFs, of which Deutsche AM offers an extensive range, and increasing ETF adoption by retail investors through greater use of digital investment services.

Db X-tracker ETFs attract over $27bn in net new assets during 2015

Simon Klein, Head of Distribution for Passive Investments, EMEA & Asia, Deutsche AM.

Simon Klein, Head of Distribution for Passive Investments, EMEA & Asia, at Deutsche AM, commented: “Transitioning into one of the leading providers of physical replication ETFs, significant expansion of our range of fixed income ETFs as well as an enlarged distribution team have all been cornerstones of our success. We believe we are well-positioned to move to be among the top four largest ETF providers in the world.”

The fixed income arena was, and continues to be, a major battle ground for ETF providers, with the asset class enjoying above-average industry growth in market share. In Europe, for example, fixed income ETFs recorded 35% of net inflows last year yet account for only 25% of total ETF AUM. This strength may be attributed to decreasing liquidity in the secondary market for bonds following new risk measures and capital controls imposed on banks after the 2008 financial collapse. Investors seeking efficient access fixed income are becoming increasingly aware of the enhanced diversification, tradability and liquidity benefits that are characteristic of ETFs.

Deutsche AM was able to capture a significant proportion of this growth through an established suite of well-diversified fixed income ETFs. The firm plans to further strengthen this position in 2016 by broadening the options available to investors. “This year we will launch a number of new physical replication fixed income products. We lead on innovation in the growth area of strategic beta, as again demonstrated by our solutions in the fixed income field – for example, providing quality-weighted sovereign bond exposure,” said Klein.

According to Klein, another reason for strong growth in the ETF market has been the entrance of institutional investors. As ETFs secure more assets under management, institutional investors are starting to use them more. Many institutional investors are restricted to holding a maximum of 10% of an ETF’s available assets. Therefore, only by achieving scale have ETFs made it on to the radar of these investors, who are looking for cost-effective and efficient investment in core markets such as Europe, the USA and Germany, and can now find it in the form of ETFs. These investment processes have now been implemented, and could cement a sustained growth trend for the ETF market.

Lastly, although retail channels represent a smaller part of the market, the proliferation of online portfolio management tools, known informally as “robo-advisors”, is enhancing access to diversified ETF-based portfolios for financial advisors and individual investors. The majority of such services use ETFs almost exclusively in their portfolios.

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