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Deutsche AWM launches Europe’s first ETF providing exposure to GCC equities including Saudi Arabia

Deutsche Asset & Wealth Management has listed Europe’s first ETF to provide equity exposure to Middle Eastern Gulf States, including Saudi Arabia1……


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The db x-trackers MSCI GCC Select Index UCITS ETF tracks the equity markets of all the Gulf Cooperation Council (GCC) countries, with a 65% weighting to Saudi Arabia2. The other countries in the GCC are Bahrain, Qatar, Kuwait, Oman and the United Arab Emirates. The ETF has been listed on the London Stock Exchange and the Deutsche Börse.

“The Saudi Arabian stock market has traditionally been difficult for foreign investors to access, so the launch of an index tracker providing exchange-traded exposure to all the GCC countries is a significant step forward,” said Manooj Mistry, Deutsche AWM’s head of exchange-traded products, EMEA.

The ETF has an annual All-in Fee3 of 0.65% and tracks the MSCI GCC Countries ex Select Securities Index, which is based on the MSCI GCC Countries Index4 but with the exclusion of a small number of stocks due to restrictions on foreign ownership. The underlying index is market capitalization-weighted and currently consists of 82 securities.

There are currently over 60 Deutsche AWM emerging market and frontier market ETFs, offering a range of equity and fixed income exposures. Deutsche AWM’s suite of emerging markets ETFs are designed to provide investors with a high level of granularity, allowing for the targeting of specific countries, regions and sectors. The db x-trackers MSCI GCC Select Index UCITS ETF is therefore an important addition to the range. 

According to the International Monetary Fund’s latest Regional Economic Outlook for the Middle East and Central Asia, oil exporting nations have been put under pressure by the recent slump in the oil price, however the organisation estimates that capital reserves held by GCC states are sufficiently high to avoid steep spending cuts and limit the drag on growth5. The GCC states are an important trading partner for the European Union, accounting for approximately four per cent of total European Union exports to non-member countries6, while the GCC region also benefits from increasing trade with China and India, and high energy demand from Asia.

Product Table

Fund Currency:USD

db X-trackers ETFISINTicker

Treatment of income/

dividends

Replication MethodAnnual all-in fee 
db x-trackers MSCI GCC Select Index UCITS ETF

IE00BQXKVQ19

XGLF

Accumulating

Indirect

0.65 %

 

1 Source: Deutsche Bank ETF Research.

2 Correct as at 19/02/2015 and subject to change. 

3 Indirect replication: Investors should note that the All-In Fee does not cover any OTC Swap Transaction Costs, which are embedded in the OTC Swap Transaction of the ETF. OTC Swap Transaction Costs are index replication costs incurred by the Swap Counterparty and may impact the performance of the ETF negatively relative to the underlying index. Index replication costs can be broken down into various categories depending on the nature of the underlying index (long, short or leveraged). A detailed description of each scenario is available in the Prospectus under the heading “Investment Objectives and Policies – Sub-Funds with an Indirect Investment Policy” . Investors can access www.etf.deutscheawm.com for information regarding the applicable scenario and an indication for the latest OTC Swap Transaction Costs.

4 Source: MSCI ( http://www.msci.com/resources/factsheets/index_fact_sheet/msci-gcc-countries-index-usd-gross.pdf).

5 http://www.imf.org/external/pubs/ft/reo/2015/mcd/eng/pdf/mreo0115.pdf

6 http://europa.eu/rapid/press-release_MEMO-93-25_en.htm

Source: ETFWorld.co.uk

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