Xtrackers GBP Overnight Rate Swap

ETF description

This ETF aims to replicate the performance of the SONIA rate. SONIA stands for 'Sterling Overnight index Average', and is the average interest rate banks lend money to each other overnight.

The ETF is aimed at investors looking for a safe place to keep their money with a little more growth than a traditional savings account might offer. It invests in very short‑term, high‑quality debt from governments and companies, making it less risky. This fund may appeal to investors who need their money to be relatively accessible and want to avoid the ups and downs of the stock market.

Issuer details

Xtrackers is a large and established provider of high quality ETFs and exchange traded commodities (ETCs). It is the ETF and ETC segment of the German asset manager DWS.

Xtrackers ETFs are listed on eleven stock exchanges globally and have over £169.53bn (as at June 2024) in assets under management, making Xtrackers one of the largest providers of ETFs and ETCs by AUM.

Index details

The Sterling Overnight index Average (SONIA) is a benchmark interest rate for overnight unsecured transactions in the British sterling market. It reflects the average rate paid by banks for overnight funds and is administered by the Bank of England.

This rate is significant in the financial markets as it serves as a reference rate for various financial products, including loans, derivatives, and securities. It replaced the London Interbank Offered Rate (LIBOR) for British sterling, providing a more reliable and accurate reflection of market conditions due to its basis on actual transactions rather than estimates.