Last checked at 9 Feb 2021 09:00
XtrackersInvestment Company with Variable CapitalRegistered office: 49, avenue J.F. Kennedy, L-1855 Luxembourg,R.C.S. Luxembourg B-119.899(the “Company”)
Important Notice to Shareholders of
Xtrackers DBLCI Commodity Optimum Yield Swap UCITS ETF2C (ISIN: LU0460391732)3C – GBP Hedged (ISIN: LU0460391906)
(the “Sub-Fund”)
9 February 2021
The board of directors of the Company (the "Board of Directors") hereby informs the shareholders of the Sub-Fund (the "Shareholders") that it has resolved to make certain changes to the Sub-Fund, as detailed below (collectively referred to as the “Changes”).
Capitalised terms used in this notice shall have the same meaning ascribed to them in the latest version of the prospectus of the Company (the “Prospectus”), unless the context otherwise requires.
The Changes will be carried out on a date between 12 March 2021 and 11 June 2021 (the "Effective Date"). Once the Changes have been implemented, a notice will be published on the website of the Company, http://www.Xtrackers.com (the “Company’s Website”), confirming the Effective Date.
A) OVERVIEW OF CHANGES
1) Change of Reference Index
The Board of Directors has resolved to change the investment objective of the Sub-Fund as follows.
a) Xtrackers DBLCI Commodity Optimum Yield Swap UCITS ETF
Currently, the investment objective of this Sub-Fund is to reflect the performance of the Deutsche Bank Liquid Commodity Index-Optimum Yield Balanced Index (the “Current Reference Index”) and the investment objective of each of the Share Classes of this Sub-Fund is to reflect the performance of:
(i) in respect of unhedged Share Classes, the Current Reference Index; or
(ii) in respect of Currency Hedged Shared Classes, an index that is linked to the Current Reference Index and hedged into the relevant currency of the Share Class.
The Current Reference Index is administered by Deutsche Bank AG (the "Current Reference Index Administrator").
From the Effective Date, the investment objective of this Sub-Fund, including the Currency Hedged Share Classes, will be to reflect the performance of the Bloomberg ex-Agriculture & Livestock 15/30 Capped 3 Month Forward Index (for the purpose of this section a), the “New Reference Index”).
The New Reference Index is designed to reflect the performance of a broad commodity investment by providing exposure to a diversified basket of commodity future contracts.
Relevant differences between the Current Reference Index and the New Reference Index include, but are not limited to, the following:
Securities included: The New Reference Index does not include future contracts that represent the agricultural and livestock sector.Fees: The New Reference Index has no embedded index fee.Rebalancing frequency: The Current Reference Index is rebalanced annually. The New Reference Index is rebalanced monthly.Index Administrator: The New Reference Index is administered by Bloomberg Index Services Limited (the "New Index Administrator").The change to the New Reference Index is proposed due to low performance and high fees for the Sub-Fund whilst tracking the Current Reference Index. The New Index Administrator being a leader in the field of commodity indexing and due to the New Reference Index not having index fees, the Board of Directors deems it to be in the best interests of the Shareholders to restructure the Sub-Fund to reflect the New Reference Index.
Further details on the index methodology of the New Reference Index can be found on www.bloomberg.com/professional/product/indices/bloomberg-commodity-index-family.
2) Changes to the currency hedging model
The Board of Directors has resolved to make certain additional changes to the Currency Hedged Share Classes as detailed below (such changes in relation to the Sub-Fund, the “Hedging Changes”).
The Hedging Changes are being made in order that the Company will be better positioned to meet the requirements of ESMA’s opinion in relation to UCITS share classes (ESMA 34-43-296) (the “ESMA Opinion”).
Currently, the Currency Hedged Share Classes of the Sub-Fund track a currency hedged version of the Current Reference Index of the Sub-Fund (each a “Hedged Index”). As of the Effective Date, the Currency Hedged Share Classes will track the New Reference Index (which is not hedged). State Street Bank & Trust Company, London Branch will be appointed as “Currency Hedging Manager” for the Sub-Fund. As per this methodology, the Currency Hedging Manager will seek to hedge the Denomination Currency of the Currency Hedged Share Class against the currency exposures of the underlying securities in the New Reference Index, which differ to the Denomination Currency of that Currency Hedged Share Class. The Currency Hedging Manager will generally hedge these currency exposures at Share Class level by entering into currency forward exchange contracts or other types of derivative contracts, which reflect a foreign exchange hedging exposure.
In line with the ESMA opinion, the Currency Hedging Manager will also seek to ensure that any over-hedged or under-hedged positions caused by external factors outside the control of the Company will not exceed 105% of the Net Asset Value of the Currency Hedged Share Class and will not fall short of 95% of the portion of the Net Asset Value of the Currency Hedged Share Class which is to be hedged against currency movements.
Investors should note that the Currency Hedged Share Classes will not completely eliminate currency risk, or provide a precise hedge, and as such, investors may have exposures to currencies other than the currency of the Currency Hedged Share Class.
Investors should note that there may be costs associated with the use of foreign exchange hedging transactions which will be borne by the Currency Hedged Share Class.
Given that the Currency Hedged Share Class will no longer track the Hedged Index, as of the Effective Date the anticipated level of Tracking Error disclosed for the Currency Hedged Share Classes will represent the anticipated level of Tracking Error of the unhedged Share Class(es) of the Sub-Fund against the New Reference Index.
3) Changes to Sub-Fund base currency
From the Effective Date the base currency of the Sub-Fund will be amended from EUR to USD. For avoidance of doubt the Share Class currencies remain unchanged.
4) Changes to Sub-Fund names
As a result of the Changes the Board of Directors has resolved to change the names of the Sub-Fund as detailed in Appendix I hereto, with effect from the relevant Effective Date.
5) Reduction of Management Company Fee (for certain share classes only)
The Board of Directors has resolved to reduce the Management Company Fee in respect of certain Share Classes of the Sub-Fund as follows:
Sub-Fund | Share Class | Current Management Fee | New Management Fee |
Xtrackers DBLCI Commodity Optimum Yield Swap UCITS ETF | 3C-GBP Hedged (LU0460391906) | “up to 0.40% p.a.” | “up to 0.24% p.a.” |
As a result of the above changes to the Management Company Fee, the All-In Fee applicable to the above mentioned Share Classes will be amended as described in Appendix I hereto.
6) Changes to cut off times
Due to the Hedging Changes the applicable Cut-off Time for the Sub-Fund will be amended from 5.00 p.m. to 3.30 p.m. Luxembourg time on the relevant Transaction Day.
B) GENERAL INFORMATION
Shareholders should be aware that certain transaction costs and duties will arise as a result of the Changes which will be borne by the Sub-Fund. Under normal market circumstances the transaction costs and duties are expected to be immaterial.
Shareholders who subscribe for Shares in the Sub-Fund on the primary market and who do not agree with the Changes, are entitled to redeem their Shares in the Sub-Fund in accordance with the Prospectus. Such redemptions shall be free of any Redemption Charge from the date of this notice until 5.00 p.m. (Luxembourg time) on 11 March 2021. Please note that the Company does not charge any redemption fee for the sale of Shares in the secondary market. Orders to sell Shares through a stock exchange can be placed via an authorised intermediary or stockbroker. Shareholders should note that orders in the secondary market may incur costs over which the Company has no control and to which the above exemption on redemption charges does not apply.
Copies of the revised Prospectus and the key information documents of the Sub-Fund reflecting the Changes will be made available on the Company’s Website on or around the Effective Date, and copies thereof may be obtained on request free of charge at the registered office of the Company or at the offices of foreign representatives, once available.
Shareholders who have any queries or to whom any of the above is not clear should seek advice from their stockbroker, bank manager, legal advisor, accountant or other independent financial advisor. Shareholders should also consult their own professional advisors as to the specific tax implications under the laws of the countries of their nationality, residence, domicile or incorporation.
Further information in relation to the Changes may be obtained from the legal entities mentioned under Contact information below, the offices of foreign representatives or by sending an email to Xtrackers@dws.com.
Neither the contents of the Company’s website nor the contents of any other website accessible from hyperlinks on the Company’s website is incorporated into, or forms part of, this announcement.
XtrackersThe Board of Directors
Contact information
Xtrackers49, avenue J.F. Kennedy, L-1855 Luxembourg, Grand Duchy of Luxembourg
DWS Investment S.A.2, boulevard Konrad Adenauer, L-1115 Luxembourg, Grand Duchy of Luxembourg
Appendix I: Summary of Changes applicable from the Effective date
Current Sub-Fund name | Share Class | ISIN
| Current Reference Index / Hedged Index | New Sub-Fund name | New Reference Index | Changes to hedging model | New Cut-off time | New Fund base currency | New All-in Fee |
Xtrackers DBLCI Commodity Optimum Yield Swap UCITS ETF | 2C | LU0460391732 | DBLCI-OY Balanced USD Index | Xtrackers Bloomberg Commodity ex-Agriculture & Livestock Swap UCITS ETF | Bloomberg ex-Agriculture & Livestock 15/30 Capped 3 Month Forward Index | N/A | 3:30 p.m. Luxembourg | USD | N/A |
Xtrackers DBLCI Commodity Optimum Yield Swap UCITS ETF | 3C-GBP Hedged | LU0460391906 | DBLCI-OY Balanced GBP Hedged Index | Xtrackers Bloomberg Commodity ex-Agriculture & Livestock Swap UCITS ETF | Bloomberg ex-Agriculture & Livestock 15/30 Capped 3 Month Forward Index | Yes | 3:30 p.m. Luxembourg | USD | Up to 0.39% p.a. |
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