The investing world has seen a rise in the number of ETFs so far this year, as investors continue to embrace options in this market. Thanks mainly goes to a wide range of investment products in the space, which keep investors attracted despite the ups and downs in the market (Read: 3 Niche ETFs Crushing the Market).
Total products in the space now number over 1,500, with over $1.5 trillion in assets under management, suggesting a wide level of interest by many investors. Yet, despite this large number of products, some issuers haven’t stopped putting out new funds into the market, and especially so in the dividend space.
This trend continues with Deutsche Bank, a popular German firm which holds a plethora of U.S. listed exchange-traded products. The company just put out another dividend-focused ETN, and we have highlighted some of the key points regarding this fresh product below (Read: Deutsche Bank Launches 3 More Hedged Equity ETFs).
FI Enhanced Global High Yield Exchange Traded Note (FIEG)
This ETN gives a targeted exposure to a recuperating Europe, while it is best suited for high net-worth investors. This is the third ETN launched by Deutsche Bank recently following 2 other ETN launches in the similar category giving exposure to blue chip European institutions (Read: Europe ETF investing 101).
FIEG tracks the MSCI World High Dividend Yield USD Gross Total Return Index and seeks a 2x or twice leveraged daily return of its index.
In terms of FIEG fees and expenses, the calculation is pretty comprehensive as the Sec filing shows the calculation mentioned here: “Current principal amount × (initial leverage factor × index performance – 1 – investor fee on such trading day.”
This ETN is expected to charge a fee which will be based on its index’s performance and the three-month U.S. dollar London inter-bank offered rate (:LIBOR). A fee of 0.1% may be charged by the bank for repurchase and in case the product’s benchmark sheds above 40%, the principal amount of the securities will be reset for a fee of 0.05% (Read: New Income ETF Launches: RiverFront Strategic Income Fund).
Meet the Competitors
FIEG faces direct competition from its predecessors, the Barclays ETN+ FI Enhanced Europe 50 ETN (FEEU) and Credit Suisse FI Enhanced Europe 50 ETN (FIEU). All these ETNs are aligned around the index which is composed of the top 50 European blue chip companies selected from the world of 600 stocks comprising the Stoxx Europe 600 Index (Read: Switzerland ETFs: Safest Play in Europe?).
The products look to be in focus for those seeking to play a resurgent Europe, but with a focus on income. This approach could definitely be accomplished by FIEG, though volatility levels look to be extremely high with this new ETN.
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Read the analyst report on FIEG
Read the analyst report on FEEU
Read the analyst report on FIEU
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- Deutsche Bank