Comstage, the ETF brand of German Commerzbank has announced a rebranding of its entire Luxembourg domiciled ETF range per 12 March 2018 which will now have a distributing rather than accumulating policy.
The change of Comstage’s distributing policy is due to recent changes to the German investment tax law. The new Investmentsteurgesetz, which entered into force in January 2018, requires funds with an accumulating policy to pay an annual tax on returns, removing previous tax benefits.
Comstage’s administrative board said it had introduced the changes in order to manage future payouts to investors independently of dividend or other inflow. “This flexibility is particularly important in situations where investors are faced with a high pre-tax flat-rate payment.”
Comstage’s administrative board also announced that the initiation and execution of techniques involving money market instrument, securities repurchase transactions and derivatives will result in a payout of up to 30% of the respective funds’ additional returns to the administrative board. The board motivated these changes with the imposition of additional transaction costs for these techniques as a result of the European Market Infrastructure Regulation(EMIR).
The administrative board has also increased the scope for securities lending transactions in the respective funds which can now extend to up to 50% of all fund assets in some funds.
Commerzbank’s announcement follows an earlier decision in April 2017 to change the replication of 30 other Luxembourg domiciled ETFs from synthetic to physical and their distribution policy from accumulating to distributing.
A list of funds affected by the changes can be found here.