Deutsche Bank Offers Second Hedge Fund ETF

Jan 26 2011 | 2:40am ET

Deutsche Bank has launched its second exchange-traded fund of hedge funds, two years after offering its first.

The firm no doubt hopes that the db x-trackers db Strategies Hedge Fund Index ETF can replicate the success of its predecessor. The db Hedge Fund Index ETF has garnered US$1.5 billion in assets since its debut in January 2009.

The new fund invests exclusively in equity long/short and equity-market neutral hedge funds; currently, it has 13 underlying managers and invests in 17 hedge funds. Among the funds in its roster are BlackRock, GLG Partners and Marshall Wace Asset Management.

The original Deutsche Bank ETF invests across six hedge fund strategies.

Both vehicles are UCITS III-compliant and are unusual for hedge fund ETFs in that they actually invest in hedge funds, rather than seeking to track their performance.

The db Strategies ETF charges a total of 155 basis points, including a 15 bps index fee and 50 bps risk monitoring fees. Those fees do not include the fees charged by the underlying hedge funds.


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