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Vanguard launches German market ETF

Vanguard launches German market ETF

Vanguard has launched a passive product offering investors exposure to the largest listed companies on the German market.

The launch of the Dax Ucits ETF, which will be listed on the London and German stock exchanges, comes a year after Vanguard sparked a platform price war in the UK when it launched its direct-to-consumer online investment service, charging an annual account fee of just 0.15 per cent.

The annual charge for the new ETF is 0.1 per cent and the product will invest in the 30 largest companies on the German market based on market capitalisation.  

Vanguard now offers 25 Ucits ETFs for European investors and has more than $175bn (£135bn) in assets under management across its European mutual fund and ETF range, as of 30 June 2018.

Explaining the thinking behind the launch, Thomas Merz, head of European excluding UK distribution at Vanguard, said: "The Vanguard Dax Ucits ETF is designed to help investors putting together high-quality, balanced, diversified portfolios; whether that is domestic investors looking for exposure to their home market, or investors’ across Europe recognising the opportunities provided by Europe’s largest economy."

When asked for his views on Vanguard's latest ETF, Darius McDermott, managing director of Chelsea Financial Services, said it wasn't a particularly interesting product.

He said: "It is a cheap way to get access to the German stock market. We prefer the Baring German Growth fund, which has beaten the Dax by 16.16 per cent over the past years after charges."

The broader MSCI German index has lost 7 per cent year to date.

david.thorpe@ft.com