Deutsche's asset and wealth management business has expanded its range of strategic beta exchange-traded funds with a new UCITS-compliant, London-listed fund.

Deutsche Asset & Wealth Management has launched the first exchange-traded fund to provide equal-weight exposure to the FTSE 100 Index.

The db x-trackers FTSE 100 Equal Weight UCITS ETF applies the re-weighting of a market capitalisation-weighted index to equally weight all underlying stocks, with the aim of improving risk-adjusted returns. The underlying index is re-balanced every half-year.

Between December 2004 and May 2015, an equal weight version of the FTSE 100 IndexTM would have outperformed the capitalisation-weighted version by 2.6 per cent annually, according to Deutsche AWM.

“Removing the large cap bias effectively increases the weighting to the smaller cap companies in the index, which may improve the risk-adjusted performance over the long term. This is a useful alternative for investors looking for adjusted beta exposure, and complements our existing ETF on the FTSE 100, the db x-trackers FTSE 100 UCITS ETF (DR),” said Deutsche AWM's head of exchange-traded product development, EMEA, Michael Mohr.

The physical index replication fund is listed on the London Stock Exchange, with an annual all-in fee of 0.25 per cent. The fund distributes its income and does not cover securities lending. 

A dollar-hedged share class of the db x-trackers JPX-Nikkei 400 UCITS ETF has also launched on the London Stock Exchange to provide strategic beta exposure to the Japanese equity market.

As of the end of June, Deutsche AWM had €1.14 trillion ($1.27 trillion) of assets under management. Last month, the division reported net revenues that had jumped 25 per cent year-on-year to €1.4 billion in the second quarter of the year.