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Deutsche Asset Management's Xtrackers division has admitted it mis-stated the performance of around 12 Xtrackers exchange-traded funds (ETFs) between 2013 and 2017.
The ETFs affected include the Xtrackers FTSE 100 Ucits ETF (XDUK), one of the cheapest ways to access the UK stock market, with a 0.09% fee.
In an announcement to the stock exchange, Xtrackers’ board said there were instances where ETF and index performance data featured in key investor documents (KIDs) had been mis-stated over the four-year period.
A KID aims to provide investors with a succinct overview of the funds. It includes the fund’s investment objective, the types of investment held, how much past returns have fluctuated, as well as the costs.
While the discrepancies were relatively minor, they represent an embarrassment for the ETF provider, as in some cases they showed the ETF performing better against the index it tracked than it actually had.
'These misstatements were caused by either typographical errors or miscalculation of index and/or share class past performance data, Xtrackers said.
For example, in 2014 Xtrackers stated that the index which the Xtrackers FTSE 100 UCITS ETF follows had fallen by 2.7%. However, in reality it had risen by 0.7%.
It was a similar story for 2013. The KID stated the FTSE 100 had risen 14.4% when it had actually risen 18.7%. The performance of the ETF was stated as 18.4% when it had actually delivered 18.3%.
In another example, Xtrackers understated index performance by 4.8% for the Xtrackers Harvest FTSE China A-H 50 Ucits ETF (AH50) in 2017. The actual index performance over this period was 40.6%.
The errors worked both ways, with Xtrackers in some cases understating the performance of its ETFs. KID documents showed the Xtrackers MSCI Europe Ucits ETF (XEOU) fell 2.8% last year when it actually lost 1.9%.
Xtrackers' board said it had corrected the KIDs and was keen to point out that these discrepancies had no impact on the calculation and publication of the NAVs of funds.
‘Please be assured that upon identification of these mis-statements, the company has implemented robust measures and enhanced controls to substantially mitigate any risk of reoccurrence,’ Xtrackers said.