DWS expands its short-term fixed income ETF offering
11 FEB, 2026
By Joanna Piwko from RankiaPro Europe
DWS has strengthened its range of short-term bond ETFs with the launch of the Xtrackers Floating Rate Notes Active UCITS, an exchange-traded fund listed on the German Stock Exchange that seeks to offer regular income with manageable risk.
The product directly invests in floating rate notes (FRN) in euros or hedged to euros and takes as reference the iBoxx EUR FRN Investment Grade 0–3Y Capped index, with the aim of outperforming it before expenses through active management. The available class is accumulative (1C) and applies a fixed commission of 0.12% per annum.
Strategy of the new ETF
The ETF invests in FRNs issued by companies, financial entities and governments. These bonds offer variable coupons that are adjusted with little notice to reference rates such as the Euribor or the €STR, which links their profitability to the current level of interest rates and, in general, above that of conventional money market instruments. Given the short coupon fixing window —of a few months—, FRNs have a lower sensitivity to rate movements and, therefore, less price fluctuation than fixed rate bonds from comparable issuers.
The fund uses the iBoxx EUR FRN Investment Grade 0–3Y Capped index as a reference and incorporates active components: participation in the primary market, selection of values within and outside the index —including selected international FRNs— and other short-term bonds. Management prioritizes credit quality to reduce default risk.
FRNs can be particularly attractive for long-term strategies oriented to the money market: they maintain a contained price volatility and offer slightly higher current income thanks to the credit premiums of the issuers. In this way, they may be suitable for investors who wish to park liquidity with a long-term yield orientation without assuming significant price risk for extensive maturities. The benchmark index has a credit duration of 1.2 years and an approximate historical volatility of 0.30%.
Many investors are currently looking for profitability opportunities above money market levels without wanting to assume significant interest rate risks. Floating rate bonds can be very suitable for this purpose, as their interest rates are periodically adjusted and price fluctuations remain low. With our active ETF, we want to make this asset class more accessible to investors and take advantage of additional profitability sources, for example, by adding international bonds or participating more actively in the primary market compared to conventional floating rate bond ETFs in the market.
Simon Klein, global sales director of Xtrackers at DWS
