Xtrackers MSCI Germany Hedged Equity ETF (DBGR)

Overview

The fund operates with a keen focus on the German equity market, adopting a "passive" or indexing investment strategy to achieve its investment objectives. This approach aims to mirror the performance outcomes of its underlying index, which is meticulously designed to not only track the performance of the German equity sector but also to actively manage and mitigate the potential risks stemming from the fluctuating exchange rates between the U.S. dollar and the euro. In ensuring a robust alignment with its investment goal, the fund commits a significant portion of its assets, at least 80% but often much more, to securities that form part of its benchmark index. Despite this heavy reliance on a select group of securities, it's important to note that the fund is classified as non-diversified, meaning its investments are concentrated in fewer securities than a diversified fund.

Products and Services

The fund's principal products and services are centered around providing investors with a strategic pathway to gain exposure to the German equity market, ensuring a high level of adherence to its indexing strategy while simultaneously offering protection against currency risk. Each service is explained further below:

• Passive Indexing Investment Approach: The fund utilizes a passive investment strategy aimed at replicating the performance of its underlying index. This method reduces the need for active management, potentially lowering costs for investors while seeking to provide returns that closely follow the German equity market.
• Mitigation of Exchange Rate Fluctuations: An integral part of its strategy involves protecting investors from potential losses associated with the fluctuating values of the U.S. dollar and the euro. By incorporating financial instruments and strategies that offset currency risk, the fund works to ensure that the returns are more stable and reflective of the market conditions in Germany, devoid of the extra layer of currency volatility.
• Commitment to the Underlying Index: In alignment with its investment strategy, the fund ensures that a minimum of 80% of its total assets are invested in the component securities of its benchmark index. This commitment often extends far beyond the minimum threshold, reinforcing the fund's objective to closely mirror the performance of the German equity market through significant and targeted investment in the assets prescribed by the index.