DWS has entered the fixed-maturity bond ETF space, launching four Xtrackers II Target Maturity Ucits ETFs in Luxembourg. These ETFs, with fixed durations until 2027, 2029, 2031, and 2033, aim to provide regular quarterly payouts and are designed for liquidation at the end of their terms. Despite being listed in Frankfurt and available across Europe (excluding the UK), the funds will not be accessible to UK investors. With a competitive total expense ratio of 0.12%, the ETFs track Bloomberg benchmarks and focus on euro-denominated, investment-grade corporate bonds.
Competing with BlackRock in Europe
DWS’s move follows BlackRock’s introduction of a suite of fixed-term bond ETFs for European investors in August. BlackRock further expanded its offering with five new iBonds ETFs in September. The growing interest in fixed-maturity bond ETFs reflects investors’ demand for predictable income in a low-interest-rate environment.
DWS Plans Further Expansion
Simon Klein, Global Head of Xtrackers Sales at DWS, emphasized the appeal of these ETFs for income-focused investors, providing exposure to a diversified fixed-income portfolio with characteristics akin to individual bonds. Klein also revealed DWS’s strategic plans to add more funds to its fixed-maturity bond ETF offering, positioning itself to capture a growing market trend initiated by BlackRock’s earlier success.