Emerging market sector ETFs launched

Emerging market sector ETFs launched

Investors that want to drill down into specific emerging markets sectors such as energy and healthcare can now do so with a range of exchange traded funds from db X-trackers.

The firm has listed 10 funds on the London Stock Exchange, all tracking emerging market MSCI indices.

The funds cover the following sectors: consumer discretionary, consumer staples, energy, financials, healthcare, industrials, information technology, materials, telecommunications services and utilities. They are all total return indices, covering 23 emerging market economies. The ETFs’ total expense ratios are 0.65 per cent.

‘Investors who view specific emerging market sectors as having the potential to outperform can use the products to acquire cost-effective, liquid, long exposure, while active investors can use the ETFs to implement sector rotation strategies,’ the firm said as it launched the ETFs.

Like most db x ETFs, they use a synthetic replication methodology. This means it uses a swap to provide the return, rather than physically holding the companies in the indices.

Manooj Mistry, head of db X-trackers for the UK, comments: ‘Deutsche Bank ensures that db X-trackers ETFs deliver straightforward returns to investors, which means the exact returns of the underlying index minus the all-in fee and any applicable index replication costs. We have carefully put together our products to give investors the choice of accessing the emerging markets not just with effective tracking but also industry-leading standards of 100 per cent transparency on the collateral, swaps and counterparty.’

In addition, db X-trackers has also recently launched ETFs that track the performance of African equity markets, Eastern European equity markets, and Chile’s equity market.

Money Observer publishes monthly performance data on ETFs that are listed on the London Stock Exchange. The September issue is out in shops on Thursday 25 August.

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