Invesco launches Europe’s cheapest MDAX ETF

Feb 15th, 2019 | By | Category: Equities

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Invesco has launched the Invesco MDAX UCITS ETF (DEAM GY) on Deutsche Börse’s Xetra and Frankfurt exchanges.

Invesco launches Europe’s cheapest German mid-cap ETF

With a TER of 0.19%, the fund is the cheapest ETF in Europe to target the German mid-cap equity market.

The fund, which comes with a total expense ratio (TER) of 0.19%, becomes the cheapest ETF in Europe to offer exposure to Germany’s main mid-cap equity index – the MDAX.

The MDAX consists of 60 Frankfurt-listed Prime Standard shares – those that comply with above-average transparency standards – from sectors excluding technology that rank immediately below the companies included in the large-cap DAX index.

The DAX index measures the share performance of 30 of the largest and most important companies listed in Frankfurt. Company size for both indices is based on exchange turnover and market cap.

Prior to September 2018, the MDAX index consisted of 50 companies; however, Deutsche Börse expanded the selection to better reflect the scope of the German mid-cap equity market.

The MDAX is weighted by market cap. Stocks from the industrials sector account for over a quarter (28.1%) of the index weight with the next largest exposures being real estate (14.8%), health care (12.1%), materials (11.5%), and communication (9.6%).

The largest holding is the German listing of Airbus with a weight of 11.6%, followed by Deutsche Wohnen (6.0%) and MTU Aero Engines (4.2%).

The ETF trades in euros and accumulates income within its portfolio.

The cheapest German mid-cap equity ETF was previously provided by Lyxor. The Lyxor German Mid-Cap MDAX UCITS ETF (MD4X GY) was launched in June 2014 and comes with a TER of 0.20%. Being the cheapest did not, however, lead to significant net inflows for the fund which currently houses around €40 million in AUM.

The largest ETF tracking the MDAX is the iShares MDAX UCITS ETF (MDAXEX GY) which has over €1.5 billion in AUM despite its relatively higher TER of 0.51%.

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