Deutsche Asset and Wealth Management has pulled billions in new assets through its suite of exchange traded funds this year, gaining prominence as a smart-beta and internationally focused ETF provider.
The ETF provider has attracted $2.3 billion in net inflows through November, or more than double 2013 sales, reports Noblett for Ignites. Deutsche Asset and Wealth Management is now among the top 10 largest U.S. ETF managers for the year, growing to almost $4 billion in assets under management as of the end of November, compared to a little over $1 billion at the end of 2013.
“In a relatively short period as a comparative newcomer, we’ve already made up a huge amount of ground,” Fiona Bassett, head of the Americas passive business at Deutsche, said in the FT article.
Deutsche is following an “aggressive” growth plan and has seen a “breakthrough year” in executing the strategy.
While slightly late to the passive index ETF game, Deutsche is holding up remarkably well by avoiding cheap traditional beta offerings dominated by the largest players, like BlackRock’s iShares, Vanguard and State Street Global Advisor’s SPDRs. Consequently, Deutsche has been engaging in a heavy marketing blitz.
“The things that are important right now in the passive ETF space are brand — especially if you’re late to the game — and deep pockets,” Lisa Cohen, chief executive of Momentum Partners, said in the article “You’re going need to go quickly, and to do that you’re going to need to have a big budget.”
Deutsche sold off its commodities suite to Invesco PowerShares and used the money to promote its line of X-trackers products. The company offers a line of 23 X-tracker ETFs. A number of ETFs in the X-trackers suite are gaining a wider following for their international market exposure and ability to hedge currency risks. The ETF provider even hired former iShares research chief Dodd Kittsley to help promote education and awareness of the firm’s line of currency-hedged international stock ETFs. [These are the Days for Currency Hedged ETFs]
For instance, the DeutscheX-trackers MSCI EAFE Hedged Equity Fund (NYSEArca: DBEF), with $1.4 billion in assets under management, helps investors capture developed overseas market exposure in Europe, Australasia and the Far East while hedging against potential negative effects of depreciating currencies. [An EAFE ETF to Capture Overseas Growth, Hedge Forex Risks]
For more information on the ETF industry, visit our current affairs category.
Max Chen contributed to this article.