XDBG
Xtrackers Bloomberg Commodity Swap UCITS ETF 2C EUR Hedged
Published by Radif Partners · Updated
Overview
Xtrackers Bloomberg Commodity Swap UCITS ETF 2C EUR Hedged (XDBG) tracks the Bloomberg Commodity index synthetically, through a swap agreement rather than by holding the constituents, and is managed by Xtrackers. Dividends are reinvested inside the fund rather than paid out, so XDBG suits investors building a position over time. The fund is domiciled in LU, which determines the withholding tax treatment applied to its dividends. Annual charges come to 0.19% of assets, and the fund holds 2.1B under management. It is not eligible for the French PEA, but can be held in a securities account, a UK ISA or a German Depot. Its risk level is rated medium. Launched on 2007-05-22, the fund is denominated in EUR and has 19 years of track record. It is a UCITS fund, so it follows the European framework on diversification, liquidity and asset segregation. Because XDBG accumulates, nothing is taxed while the shares are held: the charge falls on disposal, against your capital gains allowance in a general account, and not at all inside an ISA or a SIPP. Domicile in LU sets the withholding the fund itself suffers on the dividends it receives, a cost absent from the stated fee but present in the return.
Ongoing charges of 0.19% place this fund 7th of 23 comparable funds, whose median is 0.35%. On £10,000 that costs about 19 a year and 190 over ten years at a constant amount, deducted daily and never visible on a statement: it shows up in the gap between the fund's return and its index's. At this level, neither low enough to be an argument nor high enough to be an obstacle, the decision rests elsewhere: on the index tracked, on the distribution policy, and on what your broker charges to buy.
This fund tracks Bloomberg Commodity through a swap: it does not hold the index constituents but a collateral basket, and exchanges that basket's return for the index's with a bank. Two consequences are real. It introduces counterparty risk, bounded by collateral revalued daily and by regulation, but not zero. And it makes possible what direct holding cannot: tracking an index closed to direct purchase, or avoiding withholding tax on dividends, which is why a synthetic fund sometimes beats its physical twin after tax. The swap's cost does not appear in the ongoing charge; it shows up in tracking difference measured over several years.
The domicile, Luxembourg, is not an administrative detail: it determines the withholding tax the fund suffers on the dividends it receives, and that loss appears in no fee table. Luxembourg has a comparable treaty network but is not as favourable as Ireland on US equities, a difference visible on a world index and not on a European one. For the holder, the UCITS framework also brings the key information document in their own language, diversification rules, and separation of the fund's assets from the issuer's.
Income is accumulated: dividends from the holdings are reinvested inside the fund rather than paid out. In a taxable account that defers taxation to the moment of sale instead of triggering it annually, leaving the whole return at work, and that is the main advantage of this share class. Two qualifications go with it. A holder who needs income has to sell units to obtain it, which is one more decision to take and sometimes at a bad moment. And the deferral is not universal: some countries tax a notional annual return whatever the distribution policy, in which case the accumulating class changes nothing.
With 2.1 billion in assets and 19 years of history, this fund has the size and the record that make closure unlikely and the spread narrow. Three checks remain, once a year, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of Bloomberg Commodity, which can change its selection or weighting rules without the fund's name moving, in which case what you hold has changed with nothing to announce it.
Bloomberg Commodity is a broad index, and that is the building block most portfolios have reason to own before any other, for a simple reason: it requires no forecast. Two points deserve checking before calling it diversified. Cap weighting concentrates the portfolio on the largest companies, so the top ten holdings can make up a substantial share, and that concentration grows without any rule changing. And the geographic scope matters: a developed-world index leaves out emerging markets, while a broad US index is not global exposure despite the international revenue of the companies it holds.
The published returns for this fund are incomplete, and that is itself information: without a multi-year record, the only available check is the structure, the 0.19% ongoing charge, 2.1 billion in assets and the replication method. A recent or little-followed fund is not a bad fund for that reason, but it can only be judged on what is known in advance rather than on what it has done.
0.19%
2.1B
2,100M EURMedium
16
Synthetic
Accumulating
EUR
LU
Bloomberg Commodity
Xtrackers
2007-05-22 (19 years)
Contextual Analysis
Fund Size
With 2.1B in assets, this is a large fund, good liquidity and tight spreads.
Fee Positioning
A TER of 0.19% is in line with the market average (~0.35%).
Track Record
Launched in 2007-05-22, this fund has 19 years of history, long and reliable track record.
Risk Profile
Medium risk, good risk/return balance for a 5+ year horizon.
Performance
Returns Summary
| Period | Ann. Return | Cumulative |
|---|---|---|
| 1 Month (est.) | – | – |
| 3 Months (est.) | – | – |
| 6 Months (est.) | – | – |
| YTD (est.) | – | – |
| 1 Year | – | – |
| 3 Years | – | – |
| 5 Years | – | – |
| Since inception (19y) | – | – |
Key Facts
Fund Profile
Themes & Zones
Holdings
Risk
How to Buy This ETF
Select your country in the menu to see available brokers and wrappers.
About this ETF
The Xtrackers Bloomberg Commodity Swap UCITS ETF 2C EUR Hedged tracks the Bloomberg Commodity index. It is managed by Xtrackers using synthetic replication and follows a accumulating distribution policy. The fund is denominated in EUR and domiciled in LU. It has a total expense ratio (TER) of 0.19%.
Similar ETFs
Frequently asked questions
What do XDBG's 0.19% charges actually cost?
They are taken from the fund's value continuously and never billed separately: on £1,000 invested that is about £1.90 a year and roughly £19 over ten years at a constant amount. That is the only cost of the fund itself. Your broker's commission and the spread between buying and selling price come on top, and they weigh most on small frequent purchases.
How do you buy XDBG, and on which venue?
Through any broker that lists ISIN LU0292106167. The same strategy often exists in several share classes with different fees and distribution policies, and what counts is the class you buy rather than the one you read about: check the ISIN, not the name. A limit order avoids paying the spread of a thin order book, particularly outside the trading hours of the underlying markets.
Is XDBG genuinely diversified?
Less so than the number of holdings suggests. Bloomberg Commodity weights its constituents by market capitalisation, so the largest companies make up a share of the fund far above their number, and that concentration deepens without any rule changing. The useful check is the weight of the top ten holdings, published monthly by Xtrackers: that figure says how many companies the outcome actually depends on.
What should you re-check on XDBG once a year?
Three things, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of Bloomberg Commodity, which can change its selection or weighting rules without the fund's name moving: in that case what you hold has changed with nothing to announce it.
What risk comes with XDBG's synthetic replication?
The fund does not hold the constituents of Bloomberg Commodity: it exchanges the return of a collateral basket for the index's return with a bank. The risk is therefore that the bank fails, which UCITS rules bound and collateral revalued daily covers. In exchange, the structure sometimes avoids withholding tax on dividends, which is why a synthetic fund can beat its physical equivalent after tax.
This ranking is for informational purposes only and does not constitute a recommendation to buy or sell any security. Displayed performance is simulated.