XMUS
Xtrackers MSCI USA UCITS ETF 1C
Published by Radif Partners · Updated
Overview
Xtrackers MSCI USA UCITS ETF 1C (XMUS) tracks the MSCI USA index and holds its constituents directly, a physical replication managed by Xtrackers. Dividends are reinvested inside the fund rather than paid out, so XMUS suits investors building a position over time. The fund is domiciled in IE, which determines the withholding tax treatment applied to its dividends. Annual charges come to 0.07% of assets, and the fund holds 11.0B under management. Over five years the fund returned 12.8% a year on average, against 22.0% over three years. 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 2014-07-22, the fund is denominated in USD and has 12 years of track record. It is a UCITS fund, so it follows the European framework on diversification, liquidity and asset segregation. Because XMUS 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 IE sets the withholding the fund itself suffers on the dividends it receives, a cost absent from the stated fee but present in the return.
At 0.07%, this fund sits among the cheapest in its category: of 224 comparable funds, only a tenth match it or do better. On £10,000 that is about 7 a year against 20 for the median fund, close to 130 of difference over a decade. Once fees are at the floor, they stop being where the difference lies: it moves to replication quality, read in the tracking difference, and to your broker's dealing cost, which can exceed the fee saving if you buy in small amounts.
Replication is physical: the fund actually holds the constituents of MSCI USA, which makes its contents verifiable line by line in the issuer's report. Two points deserve attention. Securities lending first, practised by most physical funds to reduce costs: it earns a few hundredths of a point and creates an exposure to the borrower, covered by collateral, with the annual report stating the proportion lent. Rebalancing second: every change in the index's composition forces the fund to buy and sell, and those internal costs are not in the 0.07% headline. That is why two funds at the same price do not track their index with the same fidelity.
The domicile, Ireland, 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. On US equities, the Ireland-US treaty cuts withholding from thirty to fifteen per cent, which on a world index is mechanically worth several tenths of a point a year and explains Irish dominance of this segment. 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 11.0 billion in assets and 12 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 MSCI USA, 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.
MSCI USA 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.
Over one year the fund shows 1.4% against 12.8% annualised over five years: the recent year lags the long average. Before drawing a conclusion, two possible causes have to be separated, because they have different consequences: a fall in the index tracked, which affects every fund replicating it, or a deterioration specific to the fund, which shows in the tracking difference rather than in the return.
0.07%
11.0B
11,000M USDMedium
520
Physical
Accumulating
USD
IE
MSCI USA
Xtrackers
2014-07-22 (12 years)
Contextual Analysis
Fund Size
With 11.0B in assets, this is a large fund, good liquidity and tight spreads.
Fee Positioning
A TER of 0.07% is among the lowest on the market, excellent value.
Track Record
Launched in 2014-07-22, this fund has 12 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.) | – | +0.1% |
| 3 Months (est.) | – | +0.4% |
| 6 Months (est.) | – | +0.7% |
| YTD (est.) | – | +0.6% |
| 1 Year | +1.4% | +1.4% |
| 3 Years | +22.0% | +81.4% |
| 5 Years | +12.8% | +82.8% |
| Since inception (12y) | +12.1% | +292.5% |
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 MSCI USA UCITS ETF 1C tracks the MSCI USA index. It is managed by Xtrackers using physical replication and follows a accumulating distribution policy. The fund is denominated in USD and domiciled in IE. It has a total expense ratio (TER) of 0.07%.
Similar ETFs
Frequently asked questions
What do XMUS's 0.07% charges actually cost?
They are taken from the fund's value continuously and never billed separately: on £1,000 invested that is about £0.70 a year and roughly £7 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.
Is XMUS genuinely diversified?
Less so than the number of holdings suggests. MSCI USA 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 XMUS 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 MSCI USA, 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.
Does XMUS lend out the securities it holds?
Probably in part: most physical funds lend securities to reduce their costs, and Xtrackers publishes the proportion in the annual report. Lending income is worth a few hundredths of a point, shared between the fund and the issuer. The risk is the borrower's, covered by collateral worth more than the amount lent, and it appears in the prospectus rather than in the stated fee.
Why does XMUS's Irish domicile matter?
Because it determines the withholding tax the fund suffers on the dividends it receives, and that loss appears in no fee table. The Ireland-US treaty cuts withholding from thirty to fifteen per cent on US equities, mechanically worth several tenths of a point a year on a world index. The UCITS framework also brings the key information document in your own language.
This ranking is for informational purposes only and does not constitute a recommendation to buy or sell any security. Displayed performance is simulated.