Lively growth for passive investment via db X-trackers
29 October 2013 | Investments | General | Wehmeyer Ferreira, Deutsche Securities
Passive investment is showing its lively side, according to the latest performance figures from Deutsche Securities, marketers of the db X-trackers range of JSE-listed Exchange Traded Funds (ETFs).
Industry statistics to the end of the third quarter showed assets under management (AUM) across the db X-trackers products has topped R4 billion.
The figures reflect both market growth and new investor inflows into the funds.
ETFs are a low-cost method of passive investment designed to capture the performance of a specific market index, without trying to achieve the market-beating returns sought by active investment managers.
db X-trackers ETFs focus on five offshore indices: the FTSE 100 Index in the UK, the DJ Euro Stoxx 50 Index in Europe, the MSCI USA Index, the MSCI Japan Index and the global MSCI World Index.
Wehmeyer Ferreira at Deutsche Securities said local investors were particularly keen to achieve bigger exposure to the US market. Its US ETF had achieved growth in AUM of 234% with assets now at R1,021 billion, up from R305,9 million in September 2012.
He added: "One aspect of this growth is due to the increased interest and awareness of global-exposure for South African investors.”
db X-trackers listed an additional 36 million units in the db x-tracker MSCI USA Index ETF during the course of 2013.
ETF investors in the US ETF also secured handsome returns with a 43.1% increase in the fund’s net asset value between September 2012 and 2013.
Investors in the Japanese ETF did even better, achieving a 58.1% annual return. The European ETF delivered a 51.2% return, the return on the World ETF was 43.6% while the db X-tracker ETF linked to the UK market returned 37.7%.
Despite the surge in interest in the US market, the biggest fund remains that linked to the MSCI World Index. Fund size went up 60.9%, from R811,5 million to R1,3 billion.
AUM growth for one year to September across all five products was 77.2%, taking assets from R2,301 billion to R4,078 billion.
The international ETF industry is also characterised by continued strong growth. International statistics show that the global exchange traded product industry achieved a 14.1% year-to-date increase in assets, taking AUM to an all-time high of $2.1 trillion. The number of ETPs listed globally has risen from 269 in 2003 to 3 654.
See tabulations below for the full statistical breakdown of the growth of db x-trackers.
Figures quoted are from Bloomberg, for the period ending 30 September 2013 using NAV.
