How does DBX work?

[DrewChan]

All I know is that it tracks the currency,

If I buy DBXEU and the rand weakens by R1.00 vs the Euro do all my shares increase by R1.00?

 

[DrewChan]

It does not track currencies. DBXEU tracks the EURO STOXX 50 Index which is a Blue-chip index in Europe. The Index
has become one of the leading stock exchange barometers for Europe and the euro-zone and includes 50 market sector leading euro-zone
companies

Oh I was misinformed - thanks

 

[Thor]

fck me I deleted my post mistakenly

 

[Thor]

Here is the fact sheet:

https://etf.deutscheam.com/ZAF/ENG/Download/Factsheet/ZAE000115937/-/Eurostoxx-50

 

[FrankieK]

I searched on their website but could not locate a prospectus for any of their products. Only fact sheets.

 

[DrewChan]

Here is the fact sheet:

https://etf.deutscheam.com/ZAF/ENG/Download/Factsheet/ZAE000115937/-/Eurostoxx-50

If I bought R1000 in DBXEU (fictitious amount), what would happen if the rand suddenly went to R50 to the Euro. Would DBXEU's rand value spike in response?

 

[Thor]

If I bought R1000 in DBXEU (fictitious amount), what would happen if the rand suddenly went to R50 to the Euro. Would DBXEU's rand value spike in response?

I would not be able to answer that unfortunately.

 

[FrankieK]

Euro Stoxx 50 1Y performance:


DBXEU 1Y performance:


EUR.ZAR 1Y performance:


Extrapolate away.

 

[bchip]

As Frankie points out your total gain is this
Total Return = FX Gain + Price + DivY
So if Euro goes up 10% price weakens 10% and div yield is 2% then the total = 10 + 10 + 2 = 22%
But if the Rand strengthens by 10% instead and Euro shares goes up = 10 - 10 + 2 = 12%

Just remember as enticing as the 22% might seem, if the Rand Strengthens and Euro stox goes down
thats a double whammy as well -10 -10 +2 = -18%
There is a reverse to it as well.

 

[DrewChan]

As Frankie points out your total gain is this
Total Return = FX Gain + Price + DivY
So if Euro goes up 10% price weakens 10% and div yield is 2% then the total = 10 + 10 + 2 = 22%
But if the Rand strengthens by 10% instead and Euro shares goes up = 10 - 10 + 2 = 12%

Just remember as enticing as the 22% might seem, if the Rand Strengthens and Euro stox goes down
thats a double whammy as well -10 -10 +2 = -18%
There is a reverse to it as well.

Thank you.

 

[bchip]

Pleasure

Sorry just saw a typo

But if the Rand strengthens by 10% instead and Euro shares goes up = 10 - 10 + 2 = 12%
should be
But if the Rand strengthens by 10% instead and Euro shares goes up = 10 - 10 + 2 = 2%

 

[FrankieK]

Pleasure

Sorry just saw a typo

.....

Personally I liked your first calculation more.