DWS announced today the launch of a new quality factor exchange-traded fund (ETF) – Xtrackers Russell 1000 US QARP ETF (NYSE Arca:QARP). The fund seeks investment results that generally correspond to the performance of the underlying index that aims to identify companies that have strong quality scores relative to their peers, while also looking at the value scores of the securities to avoid those quality companies that are potentially over-priced. The quality focus also seeks to avoid “value traps” – companies with favorable valuation metrics as they approach bankruptcy, that a pure value exposure would likely fall into.
“Quality investing aims to target companies that demonstrate strong and persistent profitability, stability or growth in earnings, and a strong financial foundation. In times of market volatility spikes, quality factor strategies have historically behaved defensively, which may provide opportunities for strong outperformance,” said Fiona Bassett, Global Co-Head of Passive Asset Management. “Factor strategies have historically allowed investors to generate alpha and diversify their portfolios, while managing for downside risk. QARP is designed to provide investors exposure to quality companies at a reasonable price.”
QARP, which stands for Quality at a Reasonable Price, seeks investment results that correspond generally to the performance, before fees and expenses, of the Russell 1000 2Qual/Val 5% Capped Index. The launch of QARP adds to the existing Xtrackers comprehensive factor indices line-up, which is designed to track the equity market performance of companies that have demonstrated relatively strong exposure to targeted investment style factors: value, momentum, quality, volatility and size.
“We are excited to continue our collaboration with DWS to offer innovative smart beta alternatives to investors,” said Ron Bundy, managing director of global strategic accounts for FTSE Russell. “We seek to stay at the leading edge of smart beta index development, particularly in the emerging multi-factor space and we are pleased to add a multi-factor dimension to the widely followed US large-cap Russell 1000® Index.”
To learn more about DWS’s ETFs available in the US, visit: www.Xtrackers.com.
DWS Group GmbH & Co. KGaA (DWS) is one of the world's leading asset managers with EUR700bn of assets under management (as of 31 Dec 2017). Building on more than 60 years of experience and a reputation for excellence in Germany and across Europe, DWS has come to be recognized as a source for integrated investment solutions, and innovation across a full spectrum of investment disciplines.
We offer individuals and institutions access to our strong investment capabilities across all major asset classes and solutions aligned to growth trends. Our diverse expertise in Active, Passive and Alternatives asset management – as well as our deep environmental, social and governance focus – complement each other when creating targeted solutions for our clients. Our expertise and on-the-ground-knowledge of our economists, research analysts and investment professionals are brought together in one consistent global CIO View, which guides our strategic investment approach.
DWS wants to innovate and shape the future of investing: with staff from 35 nationalities, speaking more than 75 languages rooted in 22 countries, we are local while being one global team.
ETF shares are not individually redeemable, and owners of shares may acquire those shares from the Fund, or tender such shares for the redemption to the Fund, in Creation Units only.
Consider each Fund’s investment objectives, risk factors, and charges and expenses before investing. This and other important information can be found in the Fund’s prospectus, which may be obtained by calling 1-855-DBX-ETFS (1-855-329-3837) or by viewing or downloading a prospectus at www.Xtrackers.com. Please read it carefully before investing.
DBX Advisors LLC (DBX) is the investment adviser to the Xtrackers ETFs, which are distributed by ALPS Distributors, Inc. (ALPS). DBX is an indirect, wholly-owned subsidiary of Deutsche Bank AG, neither of which is affiliated with ALPS.
Fund Risk: Investing involves risk, including possible loss of principal. Stocks may decline in value. Because the fund seeks to provide exposure to stocks based on the following multifactors – value and quality– it is expected exposure to such investment factors will detract from performance in some market environments, as more fully explained in the fund’s prospectus. This fund is non-diversified and can take larger positions in fewer issues, increasing its potential risk. Performance of the Fund may diverge from that of the Underlying Index due to operating expenses, transaction costs, cash flows, use of sampling strategies or operational inefficiencies. An investment in any fund should be considered only as a supplement to a complete investment program for those investors willing to accept the risks associated with that fund. Please read the prospectus for more information.
The Russell 1000 2Qual/Val 5% Capped Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. FTSE Russell is a trading name of certain London Stock Exchange Group companies and its licensors are not connected to and do not sponsor, advise, recommend, endorse or promote the Deutsche ETFs and do not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Deutsche ETFs. All rights in the Index vest in the relevant LSE Group company which owns the Index. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Deutsche ETFs or the suitability of the Indexes for the purpose to which it is being put by DWS. One cannot invest directly in an index.
Diversification does not guarantee against a loss.
Nothing contained herein is fiduciary or impartial investment advice that is individualized or directed to any plan, plan participant, or IRA owner regarding the advisability of any investment transaction, including any IRA distribution or rollover.
No bank guarantee | Not FDIC insured | May lose value
Alpha – The excess risk-adjusted return of a fund relative to the return
of a benchmark index.
FTSE Russell – a leading global index provider creating and managing a wide range of indexes, data and analytics solutions to meet client needs across asset classes, style and strategies. Covering 98% of the investable market and approximately $15 trillion in benchmarked assets, FTSE Russell indexes offer a true picture of global markets, combined with the specialist knowledge gained from developing local benchmarks around the world.
Momentum factor – 11-month total return, lagged 1 month.
Multi-factor – An investment strategy that identifies specific attributes of securities that are associated with excess returns and applies these factors to investments in a portfolio.
Quality factor – Company profitability and leverage.
Russell 1000 2Qual/Val 5% Capped Index – uses a transparent, rules-based multi-factor selection and weighting process designed to identify U.S. large-cap stocks exhibiting higher relative quality and value characteristics.
Size factor – Natural logarithm of each company’s total market cap.
Smart beta – An index-based strategy that eschews the typical market capitalization weighted approach in favor of other fundamental, economic or statistical measures such as GDP, earnings or volatility.
US Large-cap Russell 1000 Index – one of the original Russell US indexes developed in 1984, the U.S. large-cap Russell 1000® Index is a market capitalization weighted index measuring performance and characteristics for the 1,000 largest publicly listed U.S. stocks.
Value factor – cash-flow yield and earning yield, and sales-to-price.
Volatility factor – Standard deviation of five years’ weekly total returns.
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