Deutsche Bank has rolled out four exchange traded funds which earn returns from long or short positions in credit derivatives, which the German bank claims is a first in the ETF market.

Via its db x-trackers brand, Deutsche has listed the Markit iTraxx Europe Senior  Financials 5Y Total Return Index ETF, the Markit iTraxx Europe Senior Financials 5Y Short Total Return Index ETF, plus the Markit iTraxx Europe Subordinated Financials 5Y Total Return Index ETF and the Markit iTraxx Europe Subordinated Financials 5Y SHORT Total Return Index ETF. The funds are structured as UCITS III products and available to European investors.

The ETF market, launched in the early 1990s in the US, has become increasingly varied as investors have looked beyond relatively simple equity ETFs to products which track fixed income, commodity, private equity and infrastructure markets.

The Markit iTraxx Europe Financials indices measure the return for a credit protection buyer (short) or seller (long), holding the most recent on-the-run 5-year Markit iTraxx Europe Financials credit default swap. The indices are calculated on a total return basis which means that they accrue the residual investment not dedicated to credit exposure at the EONIA interest rate.

The db x-trackers ETFs are listed on multiple stock exchanges across Europe – Euronext Paris, Borsa Italiana, Frankfurt Xetra, London Stock Exchange and SWX Swiss Exchange and supported by a number of market makers providing liquidity in the ETFs.