Industry Updates

DWS slashes fees on gold and two bond ETFs after strong flows

XGDU now joint cheapest on the market at 0.12%

Theo Andrew


DWS has cut fees on three exchange-traded products (ETPs) which have attracted a combined $2bn of inflows over the past 12 months.

The €2.5bn Xtrackers IE Physical Gold ETC Securities (XGDU) has seen its total expense ratio (TER) reduced from 0.15% to 0.12% after attracting roughly €2.1bn of inflows in the past year.

It means XGDU is now the joint cheapest gold ETC in the European market after a price war last year saw several issuers cut fees on their gold products.

Elsewhere, the Xtrackers II Eurozone Inflation-Linked Bonds UCITS ETF (XEIN) has seen its fees cut from 0.20% to 0.15%, while the Xtrackers II Harvest China Government Bond UCITS ETF (CGB) fees have been slashed from 0.35% to 0.20%.

Both XEIN and CGB have recorded strong inflows over the past 12 months, with the former taking in €225m compared to CGB’s €133m.

Increased inflation expectations and market uncertainty have helped drive flows into the gold and inflation-linked products, the group said.

The spot price for gold was pushed near record levels hit in August 2020 this week, breaking $2,000 an ounce on 8 March. Investors piled nearly $1bn into Gold ETCs in the first week of March with demand continuing into this week.

According to DWS, demand for CGB has grown over the past year due to a yield to maturity of 2.9% making it an attractive alternative to US and European government bond markets.

Michael Mohr, head of passive products at DWS, said: “We are increasing the attractiveness of these bond ETFs and gold ETC at a time when investors are using these exposures for portfolio adjustments amidst volatility rises.”

Earlier this month, DWS became the latest issuer to launch two Paris-aligned climate ESG ETFs, The Xtrackers EMU Net Zero Pathway Paris Aligned UCITS ETF (XNZE) and the Xtrackers World Net Zero Pathway Paris Aligned UCITS ETF (XNZW).

Related news

Featured in this article