To prevent asXML from encoding vowels unwantedly, simply use an approriate XML header with encoding in advance.
If you do so, asXML will happily leave your vowels (and the header) entirely untouched.
<?php
$xmlstr =
'<?xml version="1.0" encoding="UTF-8"?>
<keys>
<key lang="en"><Insert></key>
<key lang="de"><Einfügen></key>
</keys>';
$sxe = new SimpleXMLElement($xmlstr);
$output = $sxe->asXML();
?>
$xmlstr and $output are identical now.
The subsequent use of html_entity_decode() (as proposed in the very beginning in another post) has several drawbacks:
1. It is slow
2. It is expensive
3. If there are already encoded arrow brackets or double quotes in your source for instance (as shown in the above example), markup will be broken.