New Listing

DWS launches three ultrashort-duration government bond ETFs

TERs 0.07%

Theo Andrew

Simon Klein

DWS has launched three ultrashort-duration government bond ETFs targeting the eurozone and Germany.

The three ETFs are listed on the Deutsche Boerse with total expense ratios (TERs) of 0.07%.

The ETFs are:

  • Xtrackers Germany Government Bond 0-1 UCITS ETF (XG01)

  • Xtrackers Eurozone Government Bond 0-1 UCITS ETF (XE01)

  • Xtrackers iBoxx Eurozone Government Bond Yield Plus 0-1 UCITS ETF (XYP0)

XG01 tracks the iBoxx EUR Germany 0-1 index and tracks euro-denominated German government bonds with a maximum maturity of one year and current assets of at least €1bn.

XE01 follows a similar strategy and will only invest in bonds with an investment grade rating issued in the eurozone. Tracking the iBoxx EUR Sovereigns 0-1 Capped index, country weightings are limited to 35% per country.

Finally, XYPO will invest in the euro-denominated government bonds of the five investment-grade eurozone countries with the highest bond yield.

Currently, these are Belgium, Finland, France, Italy and Spain which are all limited to 20% per bond.

The three ETFs are physically replicated and reinvest their returns.

Simon Klein (pictured), global head of Xtrackers sales at DWS, said: “Due to the rise in interest rates, we are seeing a significant increase in demand for investment solutions with short remaining maturities.

“The new ETFs offer a simple and cost-effective way to do this.”

BlackRock is the only other issuer in Europe to offer similar strategies with the €1.8bn iShares be.rexx Government Germany 0-1yr UCITS ETF (EXVMX) and the iShares €730m iShares € Govt Bond 0-1yr UCITS ETF (IBGE). However, both ETFs have TERs of 0.15%.

It is the first launch from DWS since it unveiled the ESG version of its four-strong global equity factor range in July.

In May, it launched the Xtrackers J.P. Morgan EM Local Government Bond UCITS ETF (XEML).

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