Vanguard launches DAX ETF

Jul 19th, 2018 | By | Category: Equities

Vanguard has launched the Vanguard DAX UCITS ETF which tracks the performance of the DAX, the leading German equity index.

Thomas Merz, head of distribution, Europe Ex-UK at Vanguard

Thomas Merz, head of distribution, Europe Ex-UK at Vanguard.

The DAX provides investors with exposure to the 30 largest and most important companies listed on the Frankfurt Stock Exchange by exchange turnover and market cap.

The index is weighted by market capitalisation, subject to an individual constituent cap of 10%.

The 30 stocks in the index represent around 80% of the market capitalisation of listed German equities and include well-known names such as SAP, Siemens, Bayer, Allianz, Daimler, Adidas, Volkswagen and BMW.

Pharma and healthcare represent the highest weighting by sector at 14.4%, followed by chemicals at 12.9%.

Thomas Merz, head of distribution, Europe ex-UK at Vanguard, commented, “The Vanguard DAX UCITS ETF is designed to help investors putting together high-quality, balanced, diversified portfolios; whether that’s domestic investors looking for exposure to their home market, or investors across Europe recognising the opportunities provided by Europe’s largest economy.”

The new fund is listed on London Stock Exchange with ticker VDXX LN, and on Deutsche Börse with ticker VDXX GY.

It has a total expense ratio (TER) of just 10bps, which makes it one of the cheaper of 17 ETFs which already track the index.

A couple of the funds which come in at a slightly lower cost include the €780 million ComStage DAX UCITS ETF (CBDAX GY) which comes with a TER of just 8bps. The €3.5bn Xtrackers DAX UCITS ETF (XDAX GY) is one basis point higher, charging 9bps.

The largest ETF to track the index is the €7bn iShares Core DAX UCITS ETF (DAXEX GY). The fund has a TER of 0.16%.

The launch of VDXX coincides with the 30th anniversary of the launch of the DAX. Germany has seen much change in that time, including re-unification, the establishment of the European Union, the introduction of the euro, three chancellors, the dot-com boom, and the global financial crisis of 2008.

The DAX has achieved an approximate annualised return of 9% since its inception. This means that a hypothetical €100 investment made in 1987 would potentially be worth €1291 today (although performance may have been diminished once fees were applied).

The fund becomes the 25th UCITS ETF to join the Vanguard roster.

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