Deutsche Bank will launch the first three short iTraxx ETFs this week as part of its db x-trackers Exchange Traded Fund (ETF) platform. The three new ETFs are based on new indices, developed by the International Index Company (IIC) and launched this week.The three indices will be:
• iTraxx® Europe 5-year Short TOTAL RETURN INDEX
• iTraxx® Europe HiVol 5-year Short TOTAL RETURN INDEX
• iTraxx® Europe Crossover 5-year Short TOTAL RETURN INDEX
The launch of these 3 UCITS III funds will allow European clients to buy credit protection in an ETF format for the first time. It is expected the iTraxx ETFs will be popular with corporates, insurance companies and asset managers looking for protection from market turbulence in a non derivative format. The ETFs will be available for purchase OTC and will be listed on the Italian stock exchange by the end of the month.
Marco Montanari, Head of Fixed Income ETF-Structuring at Deutsche Bank comments, "These new ETFs confirm Deutsche Bank’s innovation capabilities. We are reacting quickly to developing trends to bring new products to market as quickly and efficiently as possible. These ETFs offer clients exposure to new exciting indices in a timely manner."
Deutsche Bank launched its ETF platform, db x-trackers, this year and has already reached more than 4bn assets under management across more than 50 equity and fixed income ETFs – including the EONIA ETF, the most successful European ETF in 2007. The db x-tracker ETF platform benefits from Deutsche Bank’s market-leading index and trading capabilities.
ETFs are passive investment funds that replicate the performance of indices and trade on stock exchanges in the same way as other exchange listed securities. As ETFs do not require active management they can be offered with competitive fees. In 2006 the majority of the new assets in passive funds flowed into ETFs demonstrating the attractiveness of their cost efficient and transparent features.
ETFs were first introduced in the USA in 1993 and in Europe in 2000. As of 30 September 2007 there were 1,095 ETFs available globally with EUR 552 billion assets. In Europe there were 396 ETFs with over EUR 87 billion. The market forecast for AuM by 2011 is at EUR 1.2 trillion. ETFs on fixed income indices, especially in Europe, will be one of the main drivers of the increase in AuM.
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Deutsche Bank is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With 77,920 employees in 75 countries, Deutsche Bank offers unparalleled financial services throughout the world. The bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people.