Imho the “non discretionary” changes they make are actually quite a big deal, as it’s not disclosed properly (only in fine print). Idk, if I want to do “woke” investing, I’d go with an SRI or ESG ETF - but advertising a market neutral ETF and then excluding very important stocks is imho dishonest and borderline fraudulent.
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Yeah, Amundi is questionable, but I meant the index itself. An advantage of Solactive is that it does not have a large AUM-tracking, so index reconstitution events should attract less frontrunning, if any.
I put my hopes more into the upcoming launch of a FTSE Global All Cap by Vanguard, it will be a 100% equivalent of VT.
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That’s not accurate. The maximum reduction is 30%, not 45%. The 15% additional Swiss withholding (R-US) is deducted by Swiss brokers only if US WHT is reduced to 15%. I.e., the two deductions are not independent and Swiss brokers always deduct 30%, either 15% US WHT + 15% R-US (W-8 BEN) or 30% US WHT (no W-8 BEN).
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Thanks for sharing. But why does the factsheet say “All-in-fee 0.12%”?
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I agree, index tracking by xtrackers has a strong track record.
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Probably outdated, as its from End of April. They Likely changed the cost last minute to be extra competitive.
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Correct, I only mentioned the size of the mortgage for illustrative purposes. It wasn’t used in calculating the deduction.
Thanks, fixed.
By the way, I’m not sure if this was mentioned (can’t find mention of ticker or isin) :
https://www.ishares.com/ch/professionals/en/products/345835/ishares-msci-acwi-swap-ucits-etf ACSW / IE000CYC2B65
MSCI ACWI from iShares, swap based, IE-domiciled, TER 0.12%.
Launched in 2026, AUM is very small tho, but TER is very competitive with other swap based ACWI ETFs (and even non swap based).
BNP and Scalable ACWI ETFs are cheaper but they’re having lower TER only temporarily.
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The swap fee is not part of TER, not unlike trading fees. The fee gets directly deducted from the swap return by the counterparty. You find it usually in the financial statement somewhere. With low cost funds, this can change the comparison with a physically replicating etf considerably.
I’m aware, that said my understanding is that it’s fairly small and can be in favor of the fund (similar to how you earn with security lending, in that case it allows the counterparty to short things that can be hard to short, I think moving things off the balance sheet can also be desirable for a bank).
Edit: I wish they would publish it more visibly, it’s kinda hard to find (and check the tracking error isn’t enough since you have to take into account what they gain on the US withholding). Some people say it can be in the 5-10 bps range.
I commented b/c I checked it lately in a yearly statement, where they mentionned in an attachment an average swap fee of 0.1%. TER was 0.09 if I remember correctly.
It’s tracking difference, correct? I mention it not to be pedantic, but b/c it’s a bit of a pet peeve of mine that tracking error is often mentionned in fact sheets, although it nowadays is genereally not so important and rather tecnical. Happy to be corrected.
Yeah, but it’s not obvious because they tend to track the net return index, so they have an instant win on US dividends.
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Just checked the holdings of Xtrackers ALLW/XALL and found two positions with there own ETF Xtrackers MSCI India Swap UCITS ETF 1C and something MSCI GCC. Is this allowed for a fund with physical replication?
INVESTMENT POLICY: To achieve the aim, the fund will attempt to replicate the index, before fees and expenses, by buying a portfolio of securities that may comprise the constituents of the index or other unrelated investments as determined by DWS entities. The fund may employ techniques and instruments in order to manage risk, reduce costs and improve results. These techniques and instruments may include the use of financial contracts (derivatives)
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Funds that are newly launching have to build up their positions first. They often times have subsitutes for that to help jumpstart the fund.
Especially India has an extremely hard and long process to get into. That is why most funds that launch have an India etf first as their India holding.
They will replace them with respective stocks as time goes on.
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Following up here. Xtrackers shows a “total ongoing costs of the product” of 0.152% p.a. Quick ChatGPT research reveals that FWRA’s 0.15% p.a. is its TER/OCF figure, i.e. comparable to XALL’s 0.152%. What am I missing? In the end, the best tracking error wins, I know - but just looking at “total cost”, I am bit lost.
Thanks for this information. I did not know this. Is this generally known among investors for all new funds or specific to a certain type of funds? I am asking to better understand the assessment that follows from this fact. Should a fund that substitues be assessed differently?
Where do you see this cost? The all-in TER is 0.07%, and KID shows 0.03% of trading costs (which other funds will also have and is just an estimate anyway).
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Depends on the liquidity of the markets they are going into, with how much seed aum they are launching etc. The bigger the aum they are launching with the less substitution and sampling they need usually.
And ss said India is usually substituted when launching these products, it takes a long time due to all the paper work they have to do for that. So it’s often just a lot more efficient to just launch the fund, and substitute with an equivalent holding until they have done all the paper work. It’s mire efficient that way.
Emerging markets in general is harder to get into, due to tax regulations/liquidity etc.
I wouldn’t put too much thought on assessing into it, it’s a temporary state anyway, just to get going.
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I will for sure observe XALL and how the AUM growths. Currently I’m feeding SPDR ACWI but I like the thought of having an European provider to pay my fees ;).
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