UBS is pitching 'value investing' among German retail investors with a new open-ended certificate tracking the performance of the QIX Deutschland index, a smart beta index developed by TraderFox GmbH and calculated by Solactive which focuses on high quality German equities.
Value investing is a theme that is more easily accessible for investors who have mainly invested into fixed income products in the past, according to Marcel Langer (pictured), head public distribution Switzerland/Germany. "This topic is aimed at conservative investors looking for alternatives in stocks in the current low interest rate environment," said Langer. "We have always been offering various ideas like the 'disruptive technologies' topic, for instance. QIX Deutschland index is our latest investment theme, directed to other type of investors than for instance the ones who would invest in disruptive technologies."
According to Langer, the bank will look at how the product is adopted in its home market before it decides upon launching the tracker in other areas or deploying via other payoff types. "We launched the QIX index product just four weeks ago so we currently focus on presenting the product in the German market and then see where we go from there," said Langer. "You can obviously not compare a delta 1 index product with a capital guaranteed structure and we also cannot offer a guarantee for the long term performance of this index. This open-end tracker should be seen as a mid-to-long term investment. That does obviously not mean that the clients should not have an eye on their investment on a regular basis. 'Invest and forget' is never a good idea."
The benchmark is based on the idea to build an index with high quality criteria which is applied to the 100 biggest German listed companies. After applying a liquidity filter (daily trading volume greater than €4m) 15 criteria are used to select 25 companies. A the start the index consists of the following shares: Allianz, BASF, Bayer, Bechtle, Beiersdorf, BMW, Brenntag, Deutsche Post, ElrinKlinger, Fielmann, Fraport, Freenet, FuchsPetrolub, Henkel Vz., Hannover Rück, Hugo Boss, Jungheinrich, Linde, MTU, Rational, SAP, Siemens, Symrise, United Internet und Wirecard.
The index calculation is done semi-annually by the independent index provider Solactive. The dividends which are crucial in 'value investing' will be reinvested (Performance index) and will remain as value driver in the certificate for investors. The annual management fee is 1.5%.
Langer said that UBS is working on other ideas involving smart beta strategies although "it is too early" to talk about new products at this stage.
The tracker QIX Deutschland (DE000UBS1QX7) is open-ended, and was launched end of February 2016 by UBS Germany.
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