DWS cuts fees across five core bond ETFs

Jul 3rd, 2019 | By | Category: Fixed Income

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DWS has reduced the fees charged on five of its Xtrackers-branded UCITS ETFs providing core fixed income exposures.

ETF Fee Savings costs

DWS has lowered the fees charged on five of its core fixed income ETFs.

One fund benefitting from cheaper fees is the €2.8 billon Xtrackers II Eurozone Government Bond UCITS ETF (XGLE GR) which has lowered its expense ratio from 0.15% to 0.09%.

The fund provides exposure to euro-denominated bonds issued by eurozone governments by tracking the iBoxx € Sovereign Eurozone Index. The fee cut will save current investors in the ETF around $1.7 million annually.

Fee cuts have also been extended to two US Treasury ETFs, the $660m Xtrackers II US Treasuries UCITS ETF (XUTE GR) and the $120m Xtrackers II US Treasuries 1-3 UCITS ETF (D5BE GR), which have each seen their expense ratios trimmed from 0.12% to 0.07%.

The funds are also linked to iBoxx indices. The iBoxx $ Treasuries Index targets bonds with maturities greater than 18 months, while the iBoxx $ Treasuries 1-3 Year Index focuses on bonds with one to three years remaining till maturity.

Finally, DWS has also reduced the cost of accessing high yield exposures. Both the €190m Xtrackers II EUR High Yield Corporate Bond UCITS ETF (XHYA GR) and the $60m Xtrackers USD High Yield Corporate Bond UCITS ETF (XUHY GR) have had their expense ratios from cut from 0.35% to 0.20%.

The EUR high yield fund tracks the Markit iBoxx EUR Liquid High Yield Index which includes sub-investment grade bonds denominated in euros and issued by corporate entities globally. To be eligible for inclusion, a bond must have a remaining maturity between two and ten years. Issuer and country caps of 3% and 20% are enforced.

Meanwhile, the USD high yield ETF is linked to the Bloomberg Barclays US High Yield Very Liquid Index. This index covers US dollar-denominated high yield corporate bonds from financial, utility, and industrial issuers globally.

John Ferry, a press representative for DWS, quoted a spokesman at the company as saying, “As assets under management in Xtrackers ETFs continues to increase we regularly review our product offering to see where we can reduce fees.”

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