DWS has switched the index of its $56m emerging markets ETF to exclude China in a bid to meet investor demand for more “regionally differentiated investments”.
The Xtrackers MSCI Emerging Markets ex China UCITS ETF (XDEG) has switched from tracking the MSCI Emerging Markets Select ESG Screened index to the MSCI Emerging Markets ex China index.
As a result of the changes – which took effect on 31 July – the ETF was renamed from the Xtrackers MSCI Emerging Markets ESG Screened UCITS ETF to the Xtrackers MSCI Emerging Markets ex China UCITS ETF.
The total expense ratio (TER) has also been reduced from 0.18% to 0.16%.
The new index captures large and mid-cap stocks across 23 emerging market countries – excluding China – with 673 constituents.
The old index includes large and mid-cap securities across 24 emerging market countries and is slightly more diversified with 1073 stocks.
Simon Klein, global head of Xtrackers sales, said: "The countries in the emerging markets index account for a dynamically growing share of global economic output. As a result, the demand for regionally differentiated investments in these growth regions is also increasing."
DWS added investor interest in regionally differentiated products has been shown by inflows into global equity ETFs that exclude the US.
Elsewhere, DWS changed index methodology change on several German equity products including its $4.5bn DAX ETF in February.
The reduced fee undercuts the £1bn iShares MSCI EM ex-China UCITS ETF (EXCS) by 2 basis points.
The £945m Amundi MSCI Emerging Ex China UCITS ETF (EMXC) remains the cheapest MSCI ex China ETF with a fee of 0.15%.
