Deutsche launches multi-asset actively managed ETF

db X-trackers, Deutsche Bank’s exchange-traded funds platform, has partnered with investment manager SCM Private to launch a multi-asset, actively managed ETF.

The db X-trackers SCM Multi Asset ETF provides exposure to a portfolio of ETFs and exchange-traded commodities, with the goal of using asset allocation to accumulate returns significantly ahead of inflation. SCM Private will determine the selection and weightings on at least a monthly basis.

The new product follows the broad allocation of the SCM Absolute Return Portfolio, which has returned 27.1% since inception (8 June 2009) compared with a 12.4% return from the IMA Absolute Return Sector.

Deutsche says the db Xtracker SCM Multi-Asset ETF is one of the first active ETF to be listed on the London Stock Exchange. This is indicative of the increasing trend towards actively managed ETFs in other markets.

Alan Miller, chief investment officer of SCM Private, will be responsible for making the asset allocation decisions. He said: “Studies increasingly show that investment returns are for the most part determined by broad market exposures taken, as opposed to individual stock or bond picking. Asset allocation therefore is the key driver of outperformance, and that mantra is perfectly encapsulated in the db x-trackers SCM Multi Asset ETF.”

Operating under a set of defined investment parameters, the allocations will be made based on a total return strategy with the majority of Deutsche Bank’s ETFs and ETCs available for inclusion.

According to Bloomberg, there are just ten ETFs available in Europe that focus on asset allocation. This contrasts with the choice in mutual funds, of which there are 8,206 available in Europe that focus on asset allocation.

Miller said: “In bringing together the key benefits of Deutsche Bank’s exchange-traded products – namely their low-cost, structural integrity, diversification and full daily transparency – with the performance enhancement, we aim to achieve through actively managed asset allocation, investors can benefit from a product that bridges the traditional divide between active and passive investment.”

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