db X-trackers, Deutsche Asset & Wealth Management’s exchange-traded funds (ETF) platform, is providing European investors with liquid, easily traded access to Australian money market rates via a new London listing. …….
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The Australian overnight money market rate currently yields 3% on an annualized basis, placing it as an outlier in comparison with money market rates in other developed markets – the equivalent Sterling Overnight Index Average is currently 0.43%, while the equivalent US Federal funds rate is 0.09%. The db x-trackers II Australian Dollar Cash UCITS ETF may therefore appeal to investors searching for yield in the current low-rate environment. As the fund is denominated in Australian dollars, but trades in GBP, it may also appeal to investors looking to diversify their currency exposure, or who want to take a view on the movement of the Australian dollar.
Manooj Mistry, Head of Exchange-Traded Products, EMEA, at Deutsche Bank commented: “The Australian dollar has been characterized as a commodity currency, with a track record in recent years of persistently strengthening against other major G10 currencies. Investors can use our Australian dollar cash ETF to easily take exposure to the currency, or simply as an alternative to the currently extremely low interest rates associated with European and UK money markets.”
The ETF tracks the performance of an index which reflects a daily rolled deposit earning Australia’s official cash rate (OCR). It currently has AUD 30 million in assets under management, and is being cross-listed from Asia, where it trades on the Hong Kong and Singapore stock exchanges
Products Details
db x-trackers II AUSTRALIAN DOLLAR CASH UCITS ETF
Total Expense Ratio: 0.2% per annum
Trading Currency :GBP
Fund Currency :AUD
ISA/SIPP eligible Yes (cash component only for ISA)
UCITS IV compliant: Yes
Reporting fund status :Yes
Source: ETFWorld.co.uk
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