Xtrackers MSCI Kokusai Equity ETF (KOKU)

ETF Xtrackers MSCI Kokusai Equity ETF (DBWD) Overview

Profile

The Xtrackers MSCI Kokusai Equity ETF (DBWD) is an exchange-traded fund that tracks the performance of the MSCI Kokusai Index, a market-cap weighted index of large and mid-cap companies in developed markets outside of the US and Canada. The ETF offers exposure to a diversified portfolio of international stocks across various sectors and countries.

Key Features:

• Investment Focus: Global Developed Markets Excluding US & Canada
• Asset Allocation: Primarily Equities
• Investment Strategy: Passive, tracks the MSCI Kokusai Index

Objective

DBWD aims to provide investors with a convenient and cost-effective way to gain exposure to international developed market equities, excluding the US and Canada. This diversification can help mitigate portfolio risk and enhance potential returns.

Issuer

DWS Group

• Reputation: DWS is a well-established global asset management firm with a strong reputation for expertise and experience. It has over €800 billion in assets under management and is known for its commitment to responsible investing.
• Reliability: DWS has a proven track record of managing ETFs and mutual funds, with a history of delivering consistent performance.
• Management: The ETF is managed by a team of experienced professionals with deep knowledge of international markets and index investing.

Market Share

DBWD has a relatively small market share in its sector, with approximately 0.4% of the assets under management in developed international equity ETFs.

Total Net Assets

As of November 10, 2023, DBWD has total net assets of approximately €1.3 billion.

Moat

• Low Expense Ratio: DBWD has a competitive expense ratio of 0.20%, making it an attractive option for cost-conscious investors.
• Broad Diversification: The ETF offers exposure to a wide range of international stocks, reducing individual company risk and providing built-in diversification.
• Transparency: The underlying index and holdings are readily available, allowing investors to easily understand the ETF's composition and risk profile.

Financial Performance

Historical Performance: DBWD has delivered strong historical returns, outperforming its benchmark index in most periods.

Benchmark Comparison: The ETF has consistently outperformed the MSCI Kokusai Index over the past 3 and 5 years, demonstrating its effectiveness in tracking the index and generating alpha.

Growth Trajectory: The ETF's assets under management have been steadily increasing over the past few years, indicating growing investor interest.

Liquidity

Average Trading Volume: DBWD has an average daily trading volume of approximately 10,000 shares, ensuring sufficient liquidity for most investors.

Bid-Ask Spread: The bid-ask spread is typically tight, ranging between 0.02% and 0.04%, indicating low trading costs.

Market Dynamics

Positive Factors:

• Global economic growth: A strong global economic outlook can benefit international equities.
• Increased investor demand for international diversification: As investors seek to diversify their portfolios beyond the US, demand for international ETFs like DBWD is likely to grow.

Negative Factors:

• Rising interest rates: Higher interest rates could potentially impact the valuation of international stocks.
• Geopolitical risks: Global events like trade tensions or political instability can impact market sentiment and volatility.

Competitors

• iShares Core MSCI EAFE ETF (IEFA)
• Vanguard FTSE Developed Markets ETF (VEA)
• SPDR S&P 500 ETF (SPY)

Expense Ratio

The expense ratio for DBWD is 0.20%.

Investment Approach and Strategy

Strategy: DBWD passively tracks the MSCI Kokusai Index, aiming to replicate its performance.

Composition: The ETF primarily invests in large and mid-cap companies from developed markets excluding the US and Canada, with a focus on sectors like financials, technology, and healthcare.

Key Points

• Global Developed Market Exposure Excluding US & Canada
• Passive Management, Tracking MSCI Kokusai Index
• Low Expense Ratio of 0.20%
• Strong Historical Performance and Track Record
• Suitable for investors seeking international diversification and long-term capital appreciation

Risks

• Market Volatility: International equities can be subject to high volatility, potentially impacting short-term performance.
• Currency Risk: Changes in foreign exchange rates can affect the value of the ETF.
• Concentration Risk: The ETF's investments are concentrated in large and mid-cap companies, which could lead to higher volatility compared to broader market indices.

Who Should Consider Investing

DBWD is suitable for investors who:

• Seek exposure to global developed markets outside the US and Canada.
• Prefer a passive investment approach with low costs.
• Have a long-term investment horizon and are comfortable with market volatility.

Fundamental Rating Based on AI

Rating: 8.5/10

DBWD receives a high score due to its strong track record, low expense ratio, and diversified portfolio. The ETF is well-positioned to benefit from continued global economic growth and investor demand for international diversification. However, investors should be aware of the potential risks associated with market volatility and currency fluctuations.

Resources and Disclaimers

Data Sources:

• DWS Group
• ETF.com
• Morningstar

Disclaimer:

The information provided in this analysis is for general informational purposes only and should not be considered as financial advice. Investing in ETFs involves risks, and investors should carefully consider their investment objectives and risk tolerance before making any investment decisions.