Deutsche Bank, the world’s biggest currency firm measured by the sums it trades, today rolled out five equity ETFs that are designed to protect investors against the fluctuation of the dollar versus non-U.S. currencies.
The five ETFs, unlike a slew of existing DB ETFs and ETNs, will be marketed by an internal arm of Deutsche Bank and not by Invesco PowerShares, the Wheaton, Ill.-based firm that works with Deutsche Bank to promote and market successful securities such as the PowerShares DB Commodity Tracking Index Fund (NYSEArca: DBC). A Deutsche official said the German-based bank sees an opportunity in promoting its own products, but stressed its existing products with PowerShares won’t be affected.
The new products and their expense ratios, according to a prospectus Deutsche filed early this year, are:
- db-X MSCI Japan Currency-Hedged Equity Fund (NYSEArca: DBJP), 0.50 percent
- db-X MSCI Brazil Currency-Hedged Equity Fund (NYSEArca: DBBR), 0.60 percent
- db-X MSCI Canada Currency-Hedged Equity Fund (NYSEArca: DBCN), 0.50 percent
- db-X MSCI EAFE Currency-Hedged Equity Fund (NYSEArca: DBEF), 0.35 percent
- db-X MSCI Emerging Markets Currency-Hedged Equity Fund (NYSEArca: DBEM), 0.65 percent
The products will provide a single tool to neutralize the effects changing currency valuations can have for U.S. investors on investments that aren’t denominated in dollars. While the dollar has been in a secular decline against many currencies for much of the past 10 years, the fluctuations can cut the other way too. For example, when investors flocked to U.S. Treasurys during the financial crisis, the dollar rose against many other currencies.
The funds achieve their investment objectives by seeking to track their respective equity indexes while also investing in currency forwards, Deutsche Bank said in a press release.
The new products expand the U.S.-listed line of products Deutsche sponsors, which together have gathered $14.9 billion in assets.
When ETF-friendly advisors give advice to prospects, it’s worth noting what they shouldn’t say.
UAE and Qatar leaving iShares frontier ETF ‘FM’ poses problems, but will make the fund better.
How is defining smart beta tricky? Let us count the ways.
If you thought smart beta means not cap-weighted, think again.