Rolle im Portfolio
The fund aims to replicate the MSCI Word Index, which, with over 1,600 constituents, covers approximately 85% of the equity market capitalisation of 23 developed-markets countries. While the fund overweights the United States--which represents 55%-60% of the portfolio’s value--and has virtually zero exposure to emerging markets, it is relatively well representative of the opportunity set available to investors. Its composition in terms of market cap, sector, and style is in line with that of its average active and passive peers in the global large-cap blend equity Morningstar Category.With that in mind, we believe the fund has the potential to consistently outperform over the long term. The ETF has ranked at the top of the first quartile of the category in risk-adjusted return terms over the trailing three- and five-year periods, while other MSCI World ETFs with longer track records have enjoyed similar rankings over a 10-year period.As measured by its tracking difference (fund return less index return), the fund has shown below-average performance over the past three years in comparison with its ETF peers. With an expense ratio of 0.45%, the ETF is priced competitively against the category, but it is the second most expensive against directly comparable rivals. All factors considered, this fund stands as an above-average offering within its category. It is also an accurate tracker. But there are cheaper and better-performing directly comparable alternatives.
Fundamentale Analyse
The general environment for global developed equities has become more volatile in 2016. Forecasts for global growth have been revised slightly down to account for the buildup of downside risks, such as low commodity prices and challenging conditions in key markets--particularly China. Against this backdrop, the performance of developed economies remains uneven across major areas, while monetary policy remains the key driver of sentiment.
The US is the most important contributor to the performance of MSCI World. After a long period of sustained growth, equity valuations may look somewhat stretched. Further upside has become increasingly dependent on a revival of corporate earnings. During the last quarter of 2015, US earnings per share shrank 6.8% relative to a year earlier, while the sectors suffering a decline in profits were six out of 10--well extended beyond energy and materials. On the upside, the US economy looks fairly resilient, with a solid job market. More importantly, after hiking interest rates in Dec 2015, the US Federal Reserve has toned down tightening expectations. This may provide ongoing support to the US equity market.
Eurozone equities had a rough start of 2016, but the combination of cheap oil, positive credit growth and rising consumer demand should keep the region’s economy inching up. However, overall, the eurozone remains one of the world developed economies' growth laggards. In March 2016, the European Central Bank upped its ultra-easy monetary policy stance, with the announcement of direct interventions in the corporate bond market, as well as an expansion of liquidity provision operations at very favourable terms. This has potential to directly lower companies’ funding costs. Investors should be aware that, compared with US and developed Asian peers, eurozone companies tend to have higher revenue exposures in growth-sensitive sectors such as resources and financial services. This can result in higher relative underperformance in falling markets.
Japan, the world’s third-largest economy, has struggled for the best part of the past three decades against persistent deflationary pressures and a spiralling public debt burden. In late 2012, Prime Minister Shinzo Abe announced the launch of a package of fiscal stimulus, monetary easing, and structural reforms designed to kick-start the country’s stagnant economy. Global markets responded favourably, however gross domestic product growth remains meagre and deflationary pressures persist, which induced the Japanese central bank to introduce negative rates in early 2016. Further steps taken by the government include improving the flexibility and the productivity of the labour force, which is hampered by long-term job security, seniority-based wages, limited female participation in the workforce, and company-based labour unions.
Indexkonstruktion
The MSCI World Total Net Return Index includes approximately 85% of the equity market capitalisation of 23 developed markets countries. As we write, the index is composed of approximately 1,640 stocks. Components must meet minimum criteria for liquidity, as well as foreign-ownership restrictions. The securities are weighted by free-float market capitalisation. The index is reviewed and rebalanced quarterly. The US accounts for approximately 55%-60% of the index value, followed by Japan (8%-10%), the United Kingdom (6%-8%), and France (3%-5%). Financial services are the index’s largest sector, with 18%-20% weighting, followed by information technology (13%-15%) and consumer discretionary (12%-14%). Portfolio concentration is very limited, with the top 10 holdings accounting for 9%-11% of the total index value. Top securities include Apple with a 1%-2% weighting, followed by Microsoft and Exxon Mobil at approximately 1%.
Fondskonstruktion
The fund uses synthetic replication to provide exposure to the MSCI World Net Total Return Index (which includes dividends reinvested net of tax). Instead of holding the securities in the index, the ETF enters into an unfunded swap agreement with counterparty and parent company Deutsche Bank AG. In this transaction, the ETF uses investors’ cash to buy a substitute basket of securities and exchanges their return (net of a swap spread) for the return of the index. The substitute basket, which can change daily, is made up of liquid stocks that belong to eligible indexes and are traded on recognised exchanges. As of 31 May, the substitute basket was primarily made up of Japanese equities. The swap counterparty exposure was negative 8.7% (a percentage of the fund’s net asset value), with the substitute basket representing 108.7% of the fund’s net asset value. The fund’s holdings, which are monitored daily, are held in a segregated account at the custodian, State Street Bank Luxembourg S.C.A.
Gebühren
The ongoing charge based on expenses for the financial year ended 31 December 2015 was 0.44%, the fund is amongst the most expensive ETFs tracking the MSCI World. Index funds should provide the returns of their benchmark, less fees. However, during the past three years, this fund’s tracking difference (fund return less index return) has delivered more than that. The fund has lagged its benchmark by an amount that is less than the TER. This can be attributed to the fact that the equity swap can generate efficiencies such as tax optimisation. Investors should also consider trading costs, including bid-ask spreads and brokerage fees, when buying and selling the ETF.
Alternativen
In Europe, there are plenty more ETFs providing investors with access to global equities.
The iShares Core MSCI World ETF (TER: 0.20%) is currently the best direct alternative, followed by the synthetically replicated Amundi ETF MSCI World (TER: 0.38%) in terms of delivering the best total return against MSCI World. Other direct alternatives include the physical-optimised db x-trackers MSCI World (DR) 1C (TER: 0.19%).
In Asia, the only direct alternative to this ETF is the Lyxor UCITS ETF MSCI World (H1P, listed in Singapore, TER of 0.45%).
