Industry Updates

Income focussed smart beta from Fidelity

David Tuckwell

Today's listings


Deutsche Bank brings its US sector trackers to Switzerland

Deutsche Bank has cross-listed its six US equity sector trackers into Switzerland. They were listed first in Germany exactly one month ago today. They are:

  • db x-trackers MSCI USA Financials Index UCITS ETF DR (XUFN)

  • db x-trackers MSCI USA Information Technology Index UCITS ETF DR (XUTC)

  • db x-trackers MSCI USA Consumer Staples Index UCITS ETF DR (XUCS)

  • db x-trackers MSCI USA Consumer Discretionary Index UCITS ETF DR (XUCD)

  • db x-trackers MSCI USA Health Care Index UCITS ETF DR (XUHC)

  • db x-trackers MSCI USA Energy Index UCITS ETF DR (XUEN)

Each straightforwardly tracks an index of companies that are in one of the major six sectors of the US economy. They're all priced competitively at 0.12% a year.

UK and Germany

Fidelity lists more smart beta ETFs

Giant US active manager Fidelity fell behind in its US home market, where it was late to list any ETFs. But today's listings suggest it has no intention of being behind the eight ball in Europe, where it is listing several smart beta ETFs in Germany and the UK. They are: (German listings in square brackets)

  • Fidelity Europe Quality Income UCITS ETF (FEQD, FEQP, [FEUQ])

  • Fidelity Emerging Markets Quality Income UCITS ETF (FEMI)

  • Fidelity US Quality Income UCITS ETF (FUSP*, [FUSU])

  • Fidelity Global Quality Income UCITS ETF (FGQP*, [FGEU])

Each of the four ETFs is structured in a similar manner and differ mostly in geography. They all use in-house indexes to track large cap companies that have higher dividend yields. It is interesting to note that Fidelity chose to list its first smart beta ETFs in Europe, skipping such listings in the US.

*Funds are already listed on the London Stock Exchange in US dollars. They are now being listed in pound sterling.

Today's news from around the web

High frequency takes over ETF market making

Big banks like Goldman Sachs are being forced to give up on ETF market making as high frequency traders take over. HFTs use technology to make a market for ETFs, making them faster and cheaper than the human-run competition. Each transaction only makes a few cents profit via the bid/offer spread. But those pennies add up.

BlackRock's paper under the spotlight

FT columnist John Authers dissects BlackRock's report on why ETFs are safe. "Where I find BlackRock's paper least convincing is its repeated assertion: 'Asset allocations — not products or vehicles — drive flows into different sectors'… It is a little like the argument that guns do not kill, but rather the people who fire them — while true as far as it goes, it is much easier to kill someone if you have a gun."

TD Ameritrade brings back fees for Vanguard and iShares

TD Ameritrade is endings its deal that allowed investors to trade Vanguard and iShares ETFs for free. This will mean that trading some of the world's most-traded ETFs, like iShares S&P500 ETF (IVV) and Vanguard's Total Stock market ETF (VTI), will come at a cost of $7 once more. TD made no comment as to why.

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