Alan Miller teams with Deutsche to launch UK's first ETF of ETFs

SCM Private is launching the first exchange traded fund (ETF) of ETFs in the UK in conjunction with db X-trackers, to provide a low-cost, actively managed multi-asset strategy.

 

The db X-trackers SCM Multi Asset ETF provides exposure to a portfolio of ETFs and exchange traded commodities (ETCs), with the aim of using asset allocation to accumulate returns significantly above inflation.

SCM Private’s co-founder Alan Miller (pictured) will be responsible for actively allocating across the ETFs and ETCs, in terms of both selecting the products and the weightings on at least a monthly basis.

‘Studies increasingly show that investment returns are for the most part determined by broad market exposures taken, as opposed to individual stock or bond picking,’ Miller. ‘Asset allocation therefore is the key driver of outperformance, and that mantra is perfectly encapsulated in the db x-trackers SCM Multi Asset ETF.’

The allocations will be made based on a total return strategy, with the majority of Deutsche Bank’s ETFs and ETCs available for inclusion.

Unlike traditional fund of funds, this ETF of ETFs has an ‘all-in’ fee of 0.89% per annum, although this does not include portfolio rebalancing costs.

This fee is inclusive of the management fee of the underlying ETFs and ETCs, meaning there are no additional underlying fund of fund charges or other administration costs to bear.

‘Active asset allocation via passive instruments is set to be a growing trend, and this product is well placed to meet that demand. At a more fundamental level, it will appeal to investors looking for a straight forward and cost effective way to add an active element to their portfolio, said Manooj Mistry, head of db X-trackers for the UK.

Miller, who formerly worked at New Star Asset Management, recently launched a campaign to improve fee transparency across the funds industry.