Deutsche Bank’s ETF subsidiary, db x-trackers, has launched its first corporate bond ETF.

The new fund will track the Markit iBoxx euro liquid corporate 100 total return index using swap-based replication, with an annual management charge of 0.2%. The launch took place on the German stock exchange’s Xetra platform on Monday this week.

Previously, db x-trackers had offered exposure to corporate credit only via its iTraxx ETFs, which follow different Markit indices based on credit derivatives rather than bonds.

Corporate bond ETFs have been one of the biggest growth areas in the ETF market over the last year. The largest European fund of this type, the iShares Euro Corporate Bond ETF (LSE: IBCX), has over €3 billion in assets. IBCX tracks the iBoxx € liquid corporates index of 40 bonds, including 20 financial and 20 non-financial issues, although the iShares ETF uses an optimised portfolio to track its index and recently held 76 bonds, according to the issuer’s latest fund factsheet.

For its ETF launch, db x-trackers has worked with index provider Markit to produce a slightly broader index of 100 names, according to Arne Noack, head of fixed income ETFs at Deutsche Bank in London. The index has a 37% weighting in financials, 16% in telecoms and 12% in utilities, according to the issuer’s latest fund factsheet. In contrast to the competing iShares fund, db x-trackers will use swap-based replication, with the parent bank providing the swap.

Other competing products in Europe include Lyxor’s swap-based ETF Euro Corporate Bond (with €450 million under management and a 0.2% fee) and Amundi’s ETF Euro Corporates (also swap-based, with €107 million under management and a 0.18% annual fee), both of which track the 40-bond iBoxx € liquid corporates index. iShares also has a second euro corporate bond ETF, the iShares Barclays Euro Corporate Bond, with €700 million in assets. Priced at 0.2%, the fund tracks the much broader Barclays Capital Euro Corporate Bond index.

IndexUniverse.eu covered the European corporate bond ETF market in detail in a feature published in November.