Deutsche Bank’s strategy in the U.S. ETF space has been fairly straight forward, says Arne Noack, the director of ETF products for the bank’s asset management division in New York. The Germans want to compete on price, and think big by going small. Instead of being large cap focused, they’ve built small cap products. Instead of being in Hong Kong like BlackRock’s iShares FTSE China (FXI 24,02 -0,11 -0,46%), they went to the mainland with their X-Trackers CSI 300 China A-Shares (ASHR 24,53 -0,17 -0,69%) fund. And, instead of focusing on investment grade, they’ve built less costly mousetrap fund in the high yield space in December, called the X-Trackers USD High Yield Corporate Bond (HYLB 35,39 +0,14 +0,40%) fund.
Noack spoke with RIA Channel about their past six years in the U.S., becoming one of the big players in the currency hedged ETF space, and gave us a look into the secret sauce behind their small-cap focused X-Trackers Russell 1000 Comprehensive Factor (DEUS 48,07 +0,10 +0,21%) ETF. DEUS up nearly 14% since launching in 2015, beating their benchmark, the Russell 1000 by about 200 basis points.
Here’s what else Deustche’s ETF team has up their sleeves.