Successful launch of new UCITS III CROCI Carbon Funds
LONDON, 16 June, 2009 – Deutsche Bank’s award winning funds platform has launched two innovative UCITS III funds that provide investors exposure to a stock portfolio of attractively valued companies with low greenhouse gas emissions.
The DB Platinum CROCI Carbon 100 Euro TR Fund, a global long-only strategy, and the DB Platinum CROCI Carbon Alpha TR Fund, a global long-short strategy, target strong investment returns combined with an assessment of the ability to reduce exposure to the potentially adverse economic impact of high greenhouse gas emissions. Both these funds favour stocks which are attractive from an investment standpoint according to Deutsche Bank’s CROCI proprietary methodology and which are relatively low emitters of greenhouse gases in their respective sectors.
“These funds are innovative and meet a specific requirement for investors who are looking for low carbon investment opportunities,” said Manfred Schraepler, Head of the Funds Group at Deutsche Bank.
The CROCI Carbon 100 strategy adopts a “best of breed” approach by using the CROCI selection methodology to choose 100 stocks that have a lower emission factor than the average of their respective sectors. The CROCI Carbon Alpha strategy employs a “blended” approach by weighting all stocks, positively or negatively, from its global selection pool, in a combination of emission and CROCI factors. The negative and positive positions are matched to obtain a market-, region-, and sector-neutral portfolio, and the exposure of the strategy to this portfolio is adjusted to maintain a 5% volatility target.
The CROCI equity funds have seen over EUR 340 million of net inflows, representing a rise of 36% in assets under management since the beginning of 2009, as investors take advantage of the alpha generating potential that the CROCI funds offer.
The emission data has been developed in conjunction with Trucost Plc, a leading provider of environmental impact data, and is used to derive an emission factor for each company representing its overall emissions of greenhouse gases per unit of investment.
The funds' investment strategies are based on the assumption that companies with lower emissions than their sector average have or will have more sustainable cash flows than those with higher emissions, and that in a world of increasingly strict regulation around carbon dioxide and other greenhouse gases, higher CO2 emitters will incur costs that could damage their profitability.
While the emissions screening has, for both these strategies, significantly reduced greenhouse gas emissions relative to the selection pool, the performance of the CROCI engine has been strong. The underlying index for the long-only fund has posted year-to-date returns of 17.3%* on a live basis. The underlying index for the alpha strategy, during last year’s turbulent markets, returned, on a back-tested basis, a performance of +2.3%**, and has continued the performance into 2009, rising 3.0% since the beginning of the year.*
CROCI – Cash Return on Capital Invested – is a proprietary research model developed by Deutsche Bank and launched in 2004. It makes the valuation of companies comparable across sectors as well as markets and aims to identify the best value stocks in the market. Currently, about EUR 3.5 billion of assets are invested in accordance with strategies which are based on CROCI.
*Net of all index costs, as of 2 June 2009
**The CROCI Carbon Alpha TR Index was launched on October 23, 2008 and has no prior operating history. All pro-forma performance data prior to this date is simulated and was calculated by means of retroactive application of the index model. The simulated historical performance of the CROCI Carbon Alpha Index is shown net of performance fees, borrowing fees and environmental research cost. Transaction costs and volume weighted average cost were not included in the stimulated historical performance of the index. Past performance is not a reliable indicator of future results and the value of investments in the funds may go up as well as down.
For further information, please call:
Johanna Graf +44 20 7547 26 03
Press and media relations
The DB Platinum CROCI Carbon Funds are available in retail and institutional share classes. They are currently registered for public offer in Luxembourg, Germany and are available in other jurisdictions, subject to private placement restrictions. They offer investors daily liquidity.
About Deutsche Bank
Deutsche Bank is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With 80,277 employees in 72 countries, Deutsche Bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people.
About Funds at Deutsche Bank
Funds at Deutsche Bank began operations in May 2002 and offers a full range of funds which employ both alpha and enhanced beta strategies to access all of the different asset classes. Since launched, 110 funds have been issued with net assets of over EUR 10 billion. Deutsche Bank is the recognised industry leader in systematic Funds comprising a comprehensive range of fund platforms in Luxembourg, Ireland and the Cayman Islands.