Deutsche Bank launched today the first ETF tracking an index earning the interbank overnight cash rate published by the Reserve Bank of Australia (RBA). ….
The RBA’s interbank overnight rate is currently yielding 4.25 per cent.
Listed on the Singapore Exchange Securities Trading Limited (SGX), the ETF will be available in three different currencies: Australian dollar (KV5), Singapore dollar (KV7), and US dollar (KV6).
“This new ETF allows investors ease of access to the high yielding Australian short-term money market reference rate,” said Marco Montanari, Head of Deutsche Bank’s db x-trackers, Asia.
“The ETF can be traded in Australian dollars as a money market fund or in Singapore or US dollars to take a currency carry exposure to the Australian dollar,” he said.
The interbank overnight rate in Australia is the interest rate that banks pay or charge to borrow funds from or lend funds to other banks on an overnight unsecured basis. It is the RBA’s operational target for monetary policy, with the rate calculated and published each day.
Mr Montanari said db x-trackers has already been offering five money market ETFs worldwide, having launched its first money market ETF in 2007. The Australian money market ETF is expected to be the highest yielding ETF in db x-trackers money market product range, Mr Montanari said.
The Australian money market ETF will be compliant with the robust UCITS III regulations – a set of European Union (EU) directives that allow a fund launched in one EU state to be easily passported to other EU states, effectively creating a single market for investment funds across the EU.
The all-in fees for the Australian money market ETF will be of 0.2% per year.
Details of the new ETFs listed in Singapore are as follows: ETF Trading Currency | SGX code | Bloomberg code |
AUD | KV5 | KV5 SP |
SGD (Exposed to AUD) | KV7 | KV7 SP |
USD (Exposed to AUD) | KV6 | KV6 SP |
Deutsche Bank also listed today the first Korean Bond ETF (KT2) on SGX. It is the largest ETF provider in Singapore in terms of product offerings with a total of 27 ETFs listed on the SGX. Deutsche Bank is also the largest provider of ETFs in Hong Kong.
Mr Montanari said Deutsche Bank had ETF manufacturing capabilities as well as trading and market-making capabilities, which allowed it to offer efficient execution by ensuring constant liquidity in its ETFs during market hours.
“This latest ETF is a great example of the kind of market-leading and innovative products that have allowed Deutsche Bank ETFs to raise more than US$50 billion in assets under management globally,” Mr Montanari said.
Deutsche Bank db x-trackers was recently awarded Best Exchange-traded funds, Asia Pacific by AsianInvestor in its 2010 Investment Performance Awards.
The annual awards highlight trend-setters in institutional investment and performance across a range of asset management classes.
db x-trackers, which has ETFs listed on eight stock exchanges across Asia and Europe, has introduced to Asia the following firsts:
• 7 CSI 300 Sector ETFs (Healthcare, Consumer, Industrial, Real Estate, Banks, Utilities, Transportation)
• Inverse ETF, the S&P500 Short ETF
• Vietnam ETF, the FTSE Vietnam ETF
• Brazil ETF
• USD money market ETF
• 0% all-in fee ETF, DJ Euro STOXX 50 ETF
Source: ETFWorld – Deutsche Bank
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