NEW YORK--(BUSINESS WIRE)--Deutsche Asset & Wealth Management (Deutsche AWM) today announced the launch of its first enhanced beta exchange traded funds (ETFs), Deutsche X-trackers Russell 1000 Enhanced Beta ETF (Ticker: DEUS) and Deutsche X-trackers FTSE Developed ex US Enhanced Beta ETF (Ticker: DEEF). The ETFs are the US platform’s first, broad-based US domestic and unhedged developed international equity ETFs. They are intended to serve as core portfolio allocations as well as an alternative to traditional market cap weighted domestic and international index products.
“We are excited to launch our first suite of enhanced beta ETFs in the US,” said Fiona Bassett, Head of Passive in the Americas. “We believe this new suite complements our expertise and commitment to bringing innovative and relevant investment solutions to market, as we have seen growing investor interest in market factor diversification in addition to traditional sector and country diversification.”
DEUS tracks the Russell 1000 Comprehensive Factor Index, while DEEF tracks the FTSE Developed ex US Comprehensive Factor Index. Both FTSE Russell Comprehensive Factor indexes weight each stock within their respective underlying benchmark based on five academically-proven characteristics that influence the risk and performance of stocks:
- Value: The indexes seek to identify undervalued stocks relative to accounting values by measuring cash-flow yield, earnings yield and sales-to-price of each company.
- Quality: The indexes seek to identify high-quality companies by measuring profitability, efficiency, earnings quality and leverage.
- Momentum: The indexes seek to analyze relatively recent price movements-over-time as a potential indicator of future performance of a stock price by analyzing 11-month total return and lagged one-month returns.
- Volatility: The indexes seek to identify stocks with relatively low volatility by measuring the standard deviation of five years of weekly, total local returns on each stock.
- Size: The indexes seek to consider market capitalization in US dollars as an indicator of performance, and have found that small-cap stocks have historically outperformed large-cap stocks.
These indexes are factor weighted and not market cap weighted. The FTSE Russell methodology follows a simple, bottom-up approach that scores each stock based on each of the five factor characteristics and multiplies each stock’s starting benchmark weight by the respective score. As a result, stocks exhibiting strong factor characteristics are given higher weights within the multi-factor index.
“Multi-factor indexes have become increasingly popular as important diversification tools. Our new FTSE Russell Comprehensive Factor Indexes draw on the unique expertise of our extensive FTSE Russell global index research team, combining multiple factors in a transparent way to help investors meet their unique objectives,” said Ron Bundy, CEO North America Benchmarks for FTSE Russell. “We are excited to align with Deutsche AWM’s ETFs to offer indexes as the basis for their new ETFs.”
Offering the broadest suite of currency-hedged ETFs in the US, Deutsche’s X-trackers US platform has experienced breakthrough success. With assets totaling USD 21 billion as of November 23, 2015, the Deutsche X-trackers platform has increased by approximately 395% since year end, and has continued to be among the fastest growing exchange-traded fund (ETF) franchises in the US.1 The firm’s global exchange traded products platform is now the world’s fifth largest, with approximately USD 76.9 billion in assets under management as of September 30, 2015.2
For more information about the ETFs available in the US, visit: http://www.deutsche-etfs.com.
Deutsche Asset & Wealth Management
With USD 1.27 trillion of assets under management (as of June 30, 2015), Deutsche Asset & Wealth Management¹ is one of the world's leading investment organizations. Deutsche Asset & Wealth Management offers individuals and institutions traditional and alternative investments across all major asset classes. It also provides tailored wealth management solutions and private banking services to high-net-worth individuals and family offices.
¹ Deutsche Asset & Wealth Management is the brand name of the Asset Management and Wealth Management division of the Deutsche Bank Group. The legal entities offering products or services under the Deutsche Asset & Wealth Management brand are listed in contracts, sales materials and other product information documents.
FTSE Russell is a global index leader that provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 80 countries, covering 98% of the investable market globally and trading on over 25 exchanges worldwide.
FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $10 trillion is currently benchmarked to FTSE Russell indexes. For over 30 years, leading asset owners, asset managers, ETF providers and investment banks use FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives.
A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on applying the highest industry standards in index design and governance, and embraces the IOSCO principles. FTSE Russell is also focused on index innovation and client collaboration as it seeks to enhance the breadth, depth and reach of its offering.
FTSE Russell is wholly owned by London Stock Exchange Group. For more information, visit www.ftserussell.com.
Deutsche X-trackers ETFs (“ETFs”) are managed by DBX Advisors LLC (the “Advisor”), and distributed by ALPS Distributors, Inc. (“ALPS”). The Advisors is a subsidiary of Deutsche Bank AG, and is not affiliated with ALPS.
Global index provider FTSE Russell has recently introduced the FTSE Russell Comprehensive Factor Indexes. These two new indexes, which are initially based on the U.S. large cap Russell 1000® Index and the non-US, globally diversified FTSE Developed ex-US Index, are designed to provide diversified exposure to stocks exhibiting five factor characteristics; value, size, momentum, quality and low volatility. FTSE Russell’s “tilt-tilt” methodology captures meaningful exposure to all five target factors in a transparent manner. The FTSE Russell Comprehensive Factor Indexes are part of the FTSE Global Factor Index Series.
Consider the fund's investment objectives, risk factors, and charges and expenses before investing. This and other important information can be found in the fund’s prospectus, which may be obtained by calling 1-855-DBX-ETFS (1-855-329-3837) or by viewing or downloading a prospectus at deutsche-etfs.com. Please read it carefully before investing.
Shares of the funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be purchased and redeemed directly from the funds by authorized participants in very large creation/redemption units. There is no assurance that an active trading market for shares of a fund will develop or be maintained. The fund is new and has a limited operating history.
Investing involves risk, including possible loss of principal. Stocks may decline in value. Funds investing in a single industry, country or in a limited geographic region generally are more volatile than more diversified funds. Because the fund seeks to provide exposure to stocks based on the following multifactors – value, momentum, quality, low volatility and size – it is expected exposure to such investment factors will detract from performance in some market environments, as more fully explained in the fund’s prospectus. An investment in any fund should be considered only as a supplement to a complete investment program for those investors willing to accept the risks associated with that fund. Please read the prospectus for more information.
Investing involves risk, including possible loss of principal. Stocks may decline in value. Foreign investing involves greater and different risks than investing in US companies, including currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive company information, political instability and differing auditing and legal standards. Funds investing in a single industry, country or in a limited geographic region generally are more volatile than more diversified funds. Because the fund seeks to provide exposure to stocks based on the following multifactors – value, momentum, quality, low volatility and size – it is expected exposure to such investment factors will detract from performance in some market environments, as more fully explained in the fund’s prospectus An investment in any fund should be considered only as a supplement to a complete investment program for those investors willing to accept the risks associated with that fund. Please read the prospectus for more information.
No bank guarantee | Not FDIC insured | May lose value
Deutsche Asset & Wealth Management represents the asset management and wealth management activities conducted by Deutsche Bank AG or any of its subsidiaries. Clients will be provided Deutsche Asset & Wealth Management products or services by one or more legal entities that will be identified to clients pursuant to the contracts, agreements, offering materials or other documentation relevant to such products or services.
© 2015 Deutsche Asset & Wealth Management. All rights reserved. R-040171-1.0 DBX001686 11/13/16
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1 Source: ETF.com
2 Source: Deutsche AWM