Deutsche ETF juggernaut rolls on

ETFs, though less actively managed than their private counterparts, offer investors a significant pickup in terms of fees. The average fee in the market for an actively managed bond fund is around 109 basis points, whereas the fee for the iBoxx-based funds brought by Deutsche is 15bp, the same level as the money-market ETF.

“Deutsche Bank entered the ETF market in January, launching eight ETFs across the equity space,” said Fiona Basset, co-head of structured funds at Deutsche Bank in London. “The platform is now well into phase two of its development, with the launch of a further 11 fixed-income ETFs at the end of June. The number of funds will increase to 50 by the end of July, making Deutsche Bank the third largest provider of ETFs in Europe.”

The EONIA Total Return Index ETF is the first money-market fund brought to market, and is based on the euro overnight index average (EONIA). The iBoxx Euro and Global inflation-linked total return index funds charge 20bp and 25bp in fees respectively.

“Our range of fixed-income ETFs provides clients with a comprehensive range of flexible, cost-efficient and transparent beta solutions and includes a number of competitive advantages,” said Basset. “For example, our EONIA fund is the first money-market ETF, and over the next two weeks we will launch three credit ETFs based on the iTraxx. The breadth of the product offering will make Deutsche Bank the largest provider of fixed-income ETFs in Europe.”

The three credit funds to be launched on the Deutsche ETF platform will reference the iTraxx Europe, HiVol and Crossover indexes, and fees will be between 18 and 24bp, the bank said.

The funds will initially be listed in Germany, although they may be listed elsewhere in the future.