ETF names: What you can read from them 

Investors can see from the name of an ETF what it invests in and how it is equipped.

The ETF name tells a lot about what kind of ETF it is. Some simply come from that, like the ComStage DAX UCITS ETF, some sound more complicated, like the iShares Core MSCI World UCITS ETF USD (Acc). With a little know-how it is not difficult to decipher such names.

ETF names usually consist of at least three, usually more components:

• supplier
• underlying index
• regulatory information
• notes on equipment

First: ETF issuer

The ETF issuer is named first, such as iShares, Xtrackers or Lyxor.

Second: Underlying index

In second place is the underlying index, examples are DAX, Euro Stoxx 50 or iBoxx Euro Germany 1-3. The index name usually indicates which asset class and country/region it is.

In addition, it is sometimes stated whether one is dealing with a performance index or a price index. A performance index includes capital changes and dividend distributions (TR = Total Return, GR = Gross Return). NR (Net Return) or TNR (Total Net Return), on the other hand, means that the net dividends/interest after deduction of withholding taxes are taken into account when calculating the index.

Thirdly: Regulatory information

Regulatory information can be found in third place. For example, all ETFs listed on the Frankfurt Stock Exchange are so-called UCITS ETFs, which is cited in the name of the ETF. UCITS means that the ETF complies with the UCITS rules of the EU ("Undertakings for Collective Investments in Transferable Securities"). These serve to protect investors and determine in which assets and financial instruments a fund company may invest. For example, a maximum of 20 percent of ETF assets may be invested in a specific security. Furthermore, in the case of swap-based ETFs, the share of swaps in the fund assets may not exceed 10 percent.

This is followed by the designation "ETF". This distinguishes the ETF from similar products: ETCs (Exchange Traded Commodities), ETNs (Exchange Traded Notes) and ETPs (Exchange Traded Products, a generic term). An important difference between ETFs on the one hand and ETCs and ETNs on the other is that ETFs represent a special asset and are not part of the bankruptcy estate in the event of the bankruptcy of the custodian bank/fund company.

Fourthly: Additional information

In some cases further designations follow in fourth place:

• USD, CHF, GBP etc.: If the ETF is not denominated in Euro but in another currency, such as US Dollar (USD), Swiss Franc (CHF) or British Pound (GBP), this will be listed in the ETF name.
• Those who want to avoid exchange rate risks should pay attention to currency hedging ("hedged"). "Daily hedged" or "Monthly hedged" means that the currency hedging is adjusted daily or monthly.
• C, Acc, D, Dis, Dist describe the use of revenue. As with actively managed funds, income in the form of dividends or interest can either be retained (retained) or distributed in the case of ETFs: Accumulating is usually abbreviated as C ("capitalisation") or Acc ("accumulating"), distributing as D, or Dis, or Dist ("distributing").
• DR: The type of replication, i.e. whether it is a physically replicating or swap-based ETF, is rarely mentioned. "DR" stands for direct replication.
• DE etc.: Also the ETF domicile is rarely mentioned. Since it can have tax advantages if the domicile is in Germany, some providers list it. However, there is no uniform description: with iShares, (DE) is in the fund name, with ComStage "1".
• Short/2x/Double/3x etc..: These designations make it clear that this is not a simple reproduction of the index. "Short" means that the ETF reflects the development of the index inversely. Such ETFs can therefore be used to bet on falling prices. Attention: In the case of bonds, short can also mean that short-term bonds are shown. 2x, Double, 3x: The performance of the index is shown twice or three times.
• 1c, 2c etc: These abbreviations describe share classes: A fund can have several share classes with their own ISIN and WKN, which differ in terms of currency, fees or the way in which income is used. The designations are not standardised, details can be found in the fund prospectus.

Examples

ComStage DAX UCITS ETF: an ETF of Comstage that reflects the DAX and is UCITS compliant.

iShares Core MSCI World UCITS ETF USD (Acc): an ETF of iShares that represents the MSCI World in US dollars, is UCITS compliant and reinvests earnings. (Core is a company-specific name for iShares: the Core series consists of twelve popular equity and bond ETFs that can be used as central building blocks).

iShares EURO STOXX 50 UCITS ETF (DE): an ETF of iShares that represents the Euro Stoxx 50, is UCITS compliant and is domiciled in Germany.

ComStage Commerzbank Bund-Future Double Short UCITS ETF: A UCITS-compliant ETF from Comstage, which reflects the development on the Bund future inversely and with leverage 2.

iShares Euro Corp Bond ex-Financials 1-5yr UCITS ETF (Dist): a UCITS compliant ETF from iShares that tracks the performance of Euro Corporate Bond ex-Financials 1-5yr (European corporate bonds excluding bank bonds with maturities from 1 to 5 years) and distributes the proceeds.

Juni 2019, © Deutsche Börse AG