Fighting disease with ETFs

The world turned upside down this morning. The Cancun climate change summit has agreed a deal. And Deutsche Bank’s ETF platform, db x-trackers, has launched an ETF that helps fight Aids, tuberculosis and malaria.

Now, db x-trackers is a well-known laboratory for new ETF ideas. When I think of it, and I think of it often, I see bubbling beakers of chemicals and wild-haired men in white coats scratching their dome-shaped foreheads as they roll out the latest innovation: Sumatran grass-roofed real estate ETF, Inter-galactic small caps ETF. But fighting Aids, tuberculosis and malaria: surely that’s a bit of a stretch?

Apparently not. The new Global Fund Supporters ETF will track the Dow Jones Global Fund 50 Index to Fight AIDS, Tuberculosis and Malaria(SM)(that’s its actual name), launched today on the Frankfurt Stock Exchange. The index tracks the performance of the largest public companies that support the mission of the Global Fund, a global public/private partnership dedicated to attracting and disbursing resources to prevent and treat the three diseases in question.

The Global Fund ETF is designed to make the new Global Fund index as investable as possible. db x-trackers’ management revenues for the ETF, after costs, will go towards the Global Fund.

“We’ve seen a massive uptake in our ETFs since we launched in 2007,” said Thorsten Michalik, global head of db x-trackers. “With ever increasing numbers of investors embracing the products, and with more of those investors wishing to invest along socially-conscious lines, we are confident that the db x-trackers Global Fund Supporters ETF will be a success.”

Professor Michel Kazatchkine, executive director of the Global Fund, said the collaboration between the Global Fund and Deutsche Bank was an example of how innovative financing could both benefit investors and serve humanitarian purposes.

“With Deutsche Bank the Global Fund is showing that it is possible to do well and to do good at the same time,” he said.

In another, admittedly slightly less exciting development, db x-trackers is abandoning synthetic replication for the first time for this ETF. The Global Fund Supporters ETF uses physical replication to track its index.

Fiona Rintoul, editorial director
©2010 funds europe



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