Deutsche Asset & Wealth Management (Deutsche AWM) has rolled out a new quality-weighted eurozone sovereign bond ETF, marking in a move to enter into the fixed income smart beta market.
Dubbed as db x-trackers iBoxx Eurozone Sovereigns Quality Weighted UCITS ETF (XESQ), the new fund will offer exposure to an index of eurozone sovereign bonds that have been weighted based on criteria that focus on providing higher exposure to better quality issuers.
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The ETF, which is listed on the Deutsche Borse, will also maintain the initial benchmark diversification but with less concentration on fundamentally weak countries.
Tracking the Markit iBoxx EUR Eurozone Sovereigns Quality Weighted Index, the ETF will have an annual all-in fee of 0.20%.
Deutsche AWM head of strategic beta Martin Weithofer said: "The aim of this ETF is to provide a straightforward method of acquiring quality-focused sovereign bond exposure, and to provide investors with the potential for an improved risk versus return profile.
"The quality weighted index provides similar returns to the traditional index but with potentially lower volatility and a smaller maximum peak-to-trough decline."
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