Deutsche Bank’s exchange traded fund platform db X-trackers and investment manager SCM Private have linked up to launch a fund of ETFs.
The db X-trackers SCM multi asset ETF provides exposure to a portfolio of ETFs and exchange traded commodities and aims to use asset allocation to accumulate returns over inflation.
Allocation is determined on a monthly basis by SCM Private. It aims for a total return strategy, with the majority of Deutsche Bank’s ETFs and ETCs available for inclusion.
The ETF has an “all-in” fee of 0.89 per cent a year, which is inclusive of the management fee of the underlying ETFs and ETCs. It does not include portfolio rebalancing costs, which SCM Private estimates is around 0.1 per cent a year.
UK head of db X-trackers Manooj Mistry says: “Active asset allocation via passive instruments is set to be a growing trend. At a more fundamental level, it will appeal to investors looking for a straight- forward and cost-effective way to add an active element to their portfolio.”
Jonathan Davis Wealth Management managing director Jonathan Davis says: “I think if they get the marketing right, this has the potential to be a transformative type of offering. There is increasing demand for absolute return funds and to offer this type of fund at a charge of less than 1 per cent overall is attractive.”