German asset manager DWS has launched a clutch of new ‘smart beta’ Ucits-compliant exchange traded funds focusing on dividend income as part of its wider ‘Xtrackers’ ETF range.
The last year has seen a passives price war erupt as leading providers aggressively compete on fees for index-tracking funds.
“Xtrackers has launched three new dividend ETFs that include a quality filter as part of the securities selection process,” the group said in a statement. “There are now six Xtrackers ETFs providing exposure to global, eurozone, US and North America indices.”
DWS is the asset management subsidiary of German banking giant Deutsche Bank.
The Xtrackers Morningstar US Quality Dividend UCITS ETF, the Xtrackers Morningstar Global Quality Dividend UCITS ETF* and the Xtrackers MSCI World High Dividend Yield UCITS ETF* have listed on the Deutsche Börse and the London Stock Exchange.
The funds ultilise ‘smart beta’ screening to “tilt towards securities with attractive fundamentals as well as sustainably high dividends,” the group said.
“The index methodology for the Xtrackers MSCI World High Dividend Yield UCITS ETF for example screens out stocks with weak fundamentals based on return-on-equity, earnings variability and debt-to-equity, while also filtering out stocks with a negative or extremely high pay-out ratio and stocks that do not have a track record of persistent dividend payments.”
The two Xtrackers ETFs tracking Morningstar indices take a different approach, utilising proprietary Morningstar analysis based on the firm’s Economic Moat research methodology, which aims to build a picture of the fundamental health of a company inclusive of intangible factors such as brand impact, as well as other factors. The Morningstar quality screening therefore aims to look beyond accounting metrics.
In February the reference benchmark of the db x-trackers Euro Stoxx Select Dividend 30 UCITS ETF (DR) was changed to track a quality index, with the name of the ETF changing to the Xtrackers Euro Stoxx Quality Dividend UCITS ETF.
“We want to provide our clients with a sophisticated range of high quality income-oriented ETFs. The approach that most of our income-oriented ETFs now take, focusing on quality screening based on fundamentals and dividend sustainability, can bring a number of benefits, including lower metrics for volatility and maximum drawdown thanks to weighting in favour of more defensive stocks,” said Michael Mohr, Director, ETF Product Development.
A table of the Xtrackers dividend income ETFs is shown below.
|Annual All-in Fee
|Xtrackers Euro Stoxx Quality Dividend UCITS ETF
|Xtrackers Morningstar Global Quality Dividend UCITS ETF*
|Xtrackers Morningstar US Quality Dividend UCITS ETF*
|Xtrackers MSCI North America High Dividend Yield UCITS ETF*
|Xtrackers MSCI World High Dividend Yield UCITS ETF*
|Xtrackers Stoxx Global Select Dividend 100 Swap UCITS ETF