Deutsche releases Australian money market ETF

Deutsche Bank has released an ETF tracking the Australian money market, listed on the Singapore Exchange (SGX).

The fund, which has yearly fees of 0.2%, tracks an index reflecting the interbank overnight cash rate, published by the Reserve Bank of Australia. At present, this overnight rate is yielding 4.25%.

The interbank overnight rate in Australia is the interest rate banks pay or charge to borrow from, or lend to other banks on an overnight unsecured basis. The rate is calculated and published each day.

Db x-trackers head of Asia Marco Montanari says: "This new ETF allows investors ease of access to the high yielding Australian short-term money market reference rate."

He adds: "The ETF can be traded in Australian dollars as a money market fund or in Singapore or US dollars to take a currency carry exposure to the Australian dollar."

The fund is Ucits III compliant, allowing European investors efficient access. It enables the ETF to be launched in one EU state and be easily passported to other EU states.

The issuer's ETFs are domiciled in Luxembourg and can represent a tax efficient investment for investors compared with other off-shore ETFs, such as those based in the US which may incur up to 30% tax on distributions.

Deutsche has also released a Korean bond ETF on SGX. Montanari says Deutsche's ETF manufacturing capabilities, as well as trading and market-making capabilities, allow it to provide efficient execution and liquidity during market hours.

The issuer has ETFs listed on eight stock exchanges across Asia and Europe.