Deutsche Bank jumps into the wonderful world of yield-rich ETFs focused on utilities.
Deutsche Bank filed regulatory paperwork to bring to market a plain-vanilla equities fund, putting the Germany-based bank’s U.S. ETF unit in the middle of a vibrant pocket of the fund industry populated by the likes of the $5.3 billion Utilities Select Sector SPDR Fund (NYSEArca: XLU).
Deutsche Bank didn’t say in the filing how much the db-X Regulated Utilities Index Fund would cost or what its ticker would be. But it did say the ETF will have its primary listing on Arca, the New York Stock Exchange’s electronic platform, and also that it will be based on the DBIQ Regulated Utility Index.
The passively invested fund will seek to hold at least 80 percent of its assets in securities from that index.
In order to be considered a so-called regulated utility that qualifies for the index, a given company’s earnings before interest, taxes, depreciation and amortization (EBITDA) must be made up of no more than 25 percent non- or unregulated utilities.
Deutsche Bank currently has 10 ETFs under its db-X brand—five target-date funds and five currency-hedged. This 11th fund will be the first sector fund under the db-X brand.