Yes. There has been a lot of debate and discussion about the merits of direct replication versus indirect replication of indices. db X-trackers has been a leading provider of indirect replication ETFs, which involves the use of derivatives (swaps) to track an underlying index. We appreciate however that some investors may be more comfortable investing in products that do not use derivatives for primary portfolio management purposes.
Replication choice is a new initiative that should ensure we can serve the needs of all investors. For certain ETFs tracking the most widely used equity indices in key markets we aim to offer investors the choice of direct or indirect replication, which is a first for the ETF industry. Not only will investors be able to come to us and express their preference for the type of market risk and reward they wish to take, but they can also invest in line with their preference for how the ETF operates and achieves its index replication.