|db X-trackers Expands Leveraged Range|
|May 17, 2012 19:27 (CET)|
db X-trackers has launched four new ETFs allowing investors to take double long or short daily positions in UK Gilts and US Treasuries.
The funds are aimed at investors using short-term trading or hedging strategies, and are only suitable for the relatively small portion of ETF investors—3 percent, according to a recent Morningstar survey—who trade their ETF holdings on a daily basis.
Demand for the new products comes predominantly from institutional investors that do not have the infrastructure needed to use derivatives, according to Manooj Mistry, head of db X-trackers for the UK.
“Bond futures contracts often represent exposure to only one specific point of the yield curve. The new ETFs will be useful for investors who want to take a view on the entire bond market,” said Mistry. “This is especially the case for UK Gilts, where we estimate around 40 percent of the market is not covered by liquid futures. These products are a liquid way to access this portion of the market.”
Deutsche Bank’s GBP Gilts Total Return and US Treasuries Total Return indices are used to underlie the new funds, with the double long ETFs designed to provide twice the performance minus a financing component and the double short to provide twice the performance, plus a money market component. In both cases, rebalancing takes place daily.
The new ETFs have been listed on the London Stock Exchange, all with total expense ratios of 0.30 percent.