Industry Updates

DWS cuts fee on Indian government bond and equity ETFs

XCX5 becomes the joint cheapest Indian equity ETF in Europe

Theo Andrew


DWS has continued its fee cutting spree after slashing the total expense ratios (TERs) on an Indian government bond ETF and an Indian equity ETF.

The cuts will see the Xtrackers India Government Bond UCITS ETF (XIGB) will see its headline fee reduced from 0.38% to 0.33%, while the TER for the Xtrackers MSCI India Swap UCITS ETF (XCX5) will be reduced from 0.75% to 0.19%.

The German asset manager said it reduced the fees due to the growing investor interest in India and the changing market dynamics of emerging markets.

XIGB – already the cheapest Indian government bond ETF in the market – has now widened the gap to its rivals, the Tabula FTSE Indian Government Bond Short Duration UCITS ETF (TIND) and the L&G India INR Government Bond UCITS ETF (TIGR), both with a TER of 0.39%.

TIND launched in January as Europe’s first short duration Indian government bond ETF.

The dramatic fee cut of XCX5 now rivals the cheapest in the market, the Franklin FTSE India UCITS ETF (FRIN) which also has a TER of 0.19%.

It also makes it by far the cheapest synthetic ETF tracking Indian equities, ahead of the Amundi MSCI India II UCITS ETF (INRL) with a TER of 0.85%.

It comes as investor interest has peaked in recent months as the world’s most populous country looks set to challenge China as the dominant force in emerging markets.

Last month, the MSCI Emerging Market index rebalance took the weighting gap between India and China to historic lows.

The country’s young, growing population, tech-focused industry and reform-minded government has been a big driver of growth.

It has also become increasingly accessible to foreign investors.

The Reserve Bank of India introduced the Fully Accessible Route (FAR) scheme in March 2020, allowing foreign investors to access Indian sovereign debt without restrictions for the first time.

Olivier Souliac, head of indexing for Xtrackers products at DWS, said: “Market dynamics are changing for emerging market investors and India, as one of the most important and promising emerging markets, is contributing to this.

“We are pleased to simplify access to India for investors with more attractive ETFs.”

There have been several launches covering both Indian equities and government bonds in recent months as the market continues to grow.

Earlier this week, HSBC Asset Management launched the HSBC S&P India Tech UCITS ETF (HITC) with a TER of 0.65%.

Featured in this article