The first of the new funds is the Deutsche X-trackers Barclays International Treasury Bond Hedged ETF (BATS:IGVT), which tracks the Barclays Global Aggregate Treasury Ex USD Issuer Diversified Bond Index (USD Hedged).
The second fund just launched is the Deutsche X-trackers Barclays International Corporate Bond Hedged ETF (BATS:IFIX), which tracks the Barclays Global Aggregate Corporate Ex USD Bond Index (USD Hedged). According to fund literature, both IGVT and IFIX:
…using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the Underlying Index, which is designed to track the performance of investment grade sovereign debt publicly issued in the developed and emerging markets and denominated in the issuer’s own domestic currency (excluding all securities denominated in U.S. dollars) while mitigating exposure to fluctuations between the value of the U.S. dollar and the currencies of the countries included in the Underlying Index.
Both funds offer an expense ratio of 0.25% and begin trading today on the BATS stock exchange.
The company commented on the new funds via press release:
“During times of sharp market movements, investors are looking for stable sources of revenue. Through the new Deutsche X-trackers currency-hedged international bonds funds, we are offering investors an opportunity to potentially reduce volatility and drawdown risks while strengthening returns,” said Fiona Bassett, Head of Passive Asset Management in the Americas. “In our view, the currency hedging aspect of IGVT and IFIX allows investors an opportunity to preserve the reliable sources of income, stable and consistent cash flow typically associated with bond investments, decreasing the risk brought on by currency exposure.”
