Deutsche rolls out range of low-TER non-synthetic ETFs

Daniel Liberto

The ETFs, which are charged at an all-in annual fee of 0.09 per cent, will be linked to the Dax, FTSE 100, EuroStoxx 50 and the MSCI USA.

The MSCI USA Index ETF represents a new launch, while the other three have been relaunched as alterations to previous product offerings from the Deutsche Bank Group.

Deutsche Asset & Wealth Management has followed its competitors by aggressively reducing the total expense ratios on two of its products.

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The TER on its existing FTSE 100 Ucits ETF was previously 0.30 per cent per annum, whereas before the DAX Ucits ETF was priced at 0.15 per cent a year.

The other change included the EuroStoxx 50 Index ETF being switched from indirect to physical replication.

Both the EuroStoxx 50 Index ETF and the MSCI USA Index ETF are expected to be launched by the end of the first quarter.

According to the provider, the new range of ‘nine basis points ETFs’ will appeal to long-term, buy-and-hold investors seeking core portfolio holdings, and are expected to compete with non-exchange-traded index trackers.

Deutsche Asset & Wealth Management announced in December that it would switch 18 of its largest ETFs from indirect, synthetic replication to direct, physical replication.

The provider said it introduced its lower TER range in response to demand from investors for cheaper solutions.

Provider view

Reinhard Bellet, Deutsche Asset & Wealth Management’s head of passive asset management, said: “The combination of low TERs, intra-day liquidity, visibility and transparency offered by our ETFs should make them appeal to an even wider cross-section of the investor community.”

Adviser view

Robert Lockie, investment manager and branch principal at London-based Bloomsbury Financial Planning, said: “While it is always good when costs fall, none of the funds affected tracks an index in which we are particularly interested. We favour those which are more diversified, such as the FTSE All-Share and MSCI World indices.

“If you want to try to time movements between the FTSE 100 (100 stocks), the EuroStoxx 50 (50 stocks) and the DAX (30 stocks), or you know how to allocate between them reliably, then fine. However, it is not a game we play.

“While we do use ETFs, we generally find we can obtain lower cost exposure to the same underlying assets using the institutional share classes of open-ended funds, and as we are not day traders but long-term holders, daily pricing is fine for us.

“The switch to physical from derivative-based is welcome, but that was announced last year and does affect a fund we hold. So in summary, downwards pressure on the cost of accessing market returns is always welcome, but these particular funds are not ones that are of interest to us as they are too concentrated.”


In addition to the all-in fees quoted, the ETF could incur costs such as brokerage and other transaction fees or financial transaction taxes.


News that Deutsche Asset & Wealth Management has significantly reduced its fees should be welcomed, as should its move to switch the EuroStoxx 50 Index ETF to physical and the decision to offer exposure to the MSCI USA. The rest really depends on whether these types of indices and form of access suit the investment needs of each individual client.