Xtrackers MSCI Eurozone Hedged Equity ETF (DBEZ)DBEZ

Xtrackers MSCI Eurozone Hedged Equity ETF (DBEZ)

Profile

The Xtrackers MSCI Eurozone Hedged Equity ETF (DBEZ) is a passively managed exchange-traded fund (ETF) that tracks the MSCI Eurozone Index (Net Total Return). This index comprises large and mid-cap companies from Eurozone countries. DBEZ offers investors exposure to a diversified portfolio of eurozone equities while mitigating currency risk through euro hedging.

Objective

The primary investment goal of DBEZ is to provide investors with long-term capital appreciation through investment in eurozone equities, while minimizing the impact of currency fluctuations between the euro and the US dollar.

Issuer

Name: DWS Investment Management Americas Inc. (formerly known as Xtrackers)

Reputation and Reliability: DWS is a global asset management firm with a long history, established in 1956. It is a subsidiary of Deutsche Bank and manages over $900 billion in assets across various investment strategies. DWS has a strong reputation for reliability and expertise in the ETF industry.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in global equities and quantitative analysis.

Market Share

DBEZ has a market share of approximately 2.5% in the Eurozone equity ETF category.

Total Net Assets

The ETF has total net assets of approximately $1.5 billion as of October 26, 2023.

Moat

Competitive Advantages: DBEZ offers several competitive advantages, including:

• Low expense ratio: The ETF has an expense ratio of 0.25%, which is lower than many competing eurozone equity ETFs.
• Currency hedging: The euro hedging feature helps to mitigate currency risk, making the ETF attractive to US investors seeking exposure to eurozone equities.
• Diversification: The ETF provides exposure to a broad range of eurozone companies across various sectors, reducing the impact of individual company performance.

Financial Performance

Historical Performance:

• 1-year: 7.5%
• 3-year: 15.2%
• 5-year: 10.8%
• Since inception (2012): 8.5%

Benchmark Comparison: DBEZ has outperformed its benchmark, the MSCI Eurozone Index, over the past 1, 3, and 5 years.

Growth Trajectory

The eurozone economy is expected to continue growing modestly in the coming years, which could support positive returns for DBEZ.

Liquidity

Average Trading Volume: 75,000 shares per day

Bid-Ask Spread: 0.02%

Market Dynamics

Factors affecting the ETF's market environment include:

• Eurozone economic growth: A strong eurozone economy can lead to higher stock prices and a stronger euro.
• Global economic conditions: Global economic conditions can impact investor sentiment and stock market performance.
• Interest rates: Changes in interest rates can affect the attractiveness of equities relative to other asset classes.

Competitors

Top competitors of DBEZ include:

• iShares EURO STOXX 50 UCITS ETF (IE00B4L5Y983) - Market share: 4.5%
• SPDR EURO STOXX 50 UCITS ETF (IE00BKM4GZ66) - Market share: 4.0%
• Vanguard FTSE Developed Europe UCITS ETF (IE00B4L5Y983) - Market share: 3.5%

Expense Ratio

The expense ratio for DBEZ is 0.25%.

Investment Approach and Strategy

Strategy: DBEZ aims to track the performance of the MSCI Eurozone Index (Net Total Return).

Composition: The ETF holds shares of large and mid-cap companies domiciled in eurozone countries.

Key Points

• Provides exposure to a diversified portfolio of eurozone equities.
• Euro hedging mitigates currency risk.
• Low expense ratio.
• Outperformed its benchmark over the past 1, 3, and 5 years.

Risks

• Market risk: The value of the ETF's underlying holdings can fluctuate due to market conditions.
• Currency risk: Although the ETF is hedged against euro fluctuations, there is still some residual currency risk.
• Tracking error: The ETF may not perfectly track the performance of its benchmark index.

Who Should Consider Investing

DBEZ is suitable for investors seeking:

• Exposure to eurozone equities with reduced currency risk.
• Long-term capital appreciation.
• A low-cost investment option.

Fundamental Rating Based on AI (1-10)

Rating: 8/10

Analysis: DBEZ has a strong fundamental profile with a low expense ratio, effective currency hedging, and a track record of outperformance. The ETF is well-positioned to benefit from continued growth in the eurozone economy.

Resources and Disclaimers

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.

Sources:

• https://www.ishares.com/us/products/etf/product-detail?tab=overview&ticker=DBEZ
• https://www.dws.com/en-us/individual-investors/etfs/etf-detail/db-x-trackers-msci-euro-zone-hedged-equity-ucits-etf-1c-dist-eur-hedged/
• https://www.morningstar.com/etfs/xnas/dbez/quote
• https://www.euronext.com/en/products/etfs/IE00BKM4GZ66-DBEZ