Not only large managers are entering the world of active management of ETFs. Investment platforms are also looking for their place in this segment to try to differentiate themselves from the competition.
This is what the firm Scalable Capital has just done with the launch of the exchange-traded fund Scalable MSCI AC World Xtrackers UCITS ETFdeveloped in collaboration with DWS, through its subsidiary specialized in passive management Xtrackers, which has as its underlying index the MSCI All Country World Index (ACWI), which will allow access to shares of more than 2,600 large and medium-sized companies in 23 developed markets and 24 emerging markets.
During the first year after its launch, The total cost of this ETF will be 0% per yearthat is, no initial or performance commissions will be charged. Subsequently it will have a total cost of 0.17% per year.
One of the features of Scalable’s background is that it will combine two different methods, smart indexing and hybrid replicationin a single equity ETF. “Until now, investors had to choose between physical or synthetic replication, but depending on the underlying securities, each method has its advantages. The performance of European stock indices is replicated directly (physically) by purchasing the shares respective, while for the performance of US stock indices, the ETF World uses indirect (synthetic) replication to increase efficiency. In the case of less liquid or less accessible stock markets, such as emerging markets, synthetic ETFs can. offer a more economical and precise replica,” the firm says in a press release.
As Scalable highlights, this “efficient and cost-effective way of replicating the MSCI AC World Index allows for structural performance superior to that of traditional physical ETFs. In a simulated calculation based on several assumptions, the ETF World would have outperformed other ETFs in this index by 0.22% annually in the previous 12 months after costs”.
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