Deutsche Bank has launched two new db x-trackers ETFs, providing exposure to eurozone sovereign debt.
The Markit iBoxx Eur Sovereigns Eurozone Yield Plus Index ETF replicates the performance of euro-denominated government bonds, issued by the five highest-yielding countries within the eurozone.
The highest yielding countries are determined by calculating the yield of a hypothetical bond, with a five-year maturity.
The underlying index currently consists of bonds issued by Italy, Spain, Belgium, Portugal and Ireland. The index yields 3.98% and has a duration of 6.31 years.
The iBoxx € Sovereigns eurozone AAA fund tracks the performance of eurozone government bonds which are triple-A rated on average. The index comprises bonds issued by Germany, France, the Netherlands, Austria, Finland and Luxembourg. It yields 2.41% and has a duration of 6.62 years.
All the bonds constituting both indices must have a minimum outstanding value of €2bn and a minimum remaining time to maturity of one year, at the rebalancing date.
The two Ucits-compliant ETFs are designed to mitigate tracking error, by synthetically replicating the underlying indices. This means the ETFs use a swap with Deutsche Bank, who will return the performance of the index.
Deutsche Bank is the primary market maker for the two funds, which both have a total expense ratio of 0.15% and are listed on the Frankfurt Stock Exchange.
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