DEUTSCHE BANK LAUNCHES A FUND THAT APPLIES A SCIENTIFIC APPROACH TO LIMIT RISK AND TAKE BETTER ADVANTAGE OF THE OPPORTUNITIES OF THE STOCK MARKET

  • For the first time in Spain, Deutsche Bank applies to a fund a scientific approach to analysis and coverage, and an exclusive investment strategy for its clients.
  • The DB PWM I-A3 Portfolio-Plus 10 fund is a diversified multi-asset fund that includes a systematic hedging method that limits the potential maximum loss of 10%.
  • This coverage allows to increase equity positions over other investment solutions that assume similar risks, resulting in greater profitability in the medium term.

Deutsche Bank has launched a fund that applies a scientific approach to analysis and hedging, and an investment strategy, exclusively for German bank customers. The DB PWM I-A3 Portfolio-Plus 10 is a diversified and global multi-asset fund that protects the portfolio through the systematic analysis of probabilities and the implementation of permanent nonconditional coverage, which limits the potential loss to 10%. This strategy allows to increase the positions in equities over other investment solutions that assume similar risks, and in this way take better advantage of the increases and obtain a higher profitability in the medium term.

The launch of the DB PWM I-A3 Portfolio-Plus 10 fund responds to the need to provide solutions to moderate investors who, in the current environment of low interest rates and high volatility, do not achieve their profitability objectives and wish to know with the greater degree of confidence, the maximum loss to which they are exposed.

“Investors get carried away by our emotions when corrections occur in the markets, selling, in many cases, around the minimums. Experience has shown us that, in the equity market, the moments of falls have also been followed by moments of recovery that have meant great opportunities. The DB PWM I-A3 Portfolio-Plus 10 fund is a solution that gives us the certainty necessary to remain invested (in fact with more exposure to equities) in the medium term and, therefore, not only manages not to lose, but that we obtain more profitability “, explains Luis Martín-Jadraque, director of the Center of Investments of Deutsche Bank Spain.

For his part, Álvaro Vitorero, director of Investments and Multiactives of Deutsche Bank Wealth Management for EMEA, points out that “we apply for the first time in Spain to an investment fund the strategy developed by Deutsche Bank at an international level. The objective is clear: to offer a fund with portfolio management optimized to take advantage of market gains and systematically calculated risk management that limits falls. In this way we have launched a product aimed at moderate investors looking for medium-term investment that gives them the necessary certainty that they will be able to obtain interesting returns with a controlled risk. In an economic model where saving is vital, being able to remain invested without volatility being relevant is very important.

Compared to the traditional management model, which consists of analyzing and forecasting the “market timing”, which is extremely difficult, the DB PWM I-A3 Portfolio-Plus 10 fund is based on two strategies designed by the experts. of Deutsche Bank Wealth Management , asset management division of Deutsche Bank.

On the one hand, ‘MARE Solution’ (Multi Asset Risk Engineering) is a strategy developed by a multidisciplinary team of engineers, mathematicians and financiers, in collaboration with the management team, whose objective is to limit the losses of the portfolio through the implementation of systematic coverage instruments. The system itself establishes a maximum loss limit of 10% and protects itself from falls by analyzing the probability of future profitability of more than 10,000 liquid financial options. The MARE solution allows to remain invested and take advantage of the increases that usually occur in the days after the downturns, allows “capitalize in the long term”.

On the other hand, Strategy A3 (Active Asset Allocation), which refers to the asset allocation strategy A3 (Active Asset Allocation), reflects the global investment process of Deutsche Bank Wealth Management, which has more than 100 managers and specialists that intervene in it. The fund has a highly diversified multiactive strategy, in a global and flexible manner. The DB PWM I-A3 Portfolio-Plus 10 fund is aimed at Deutsche Bank’s private banking and wealth management clients, with a minimum investment of 10,000 euros. The fund invests worldwide in equities, fixed income, commodities and cash, including foreign currency transactions, and with a minimum time horizon of five years.

Regarding the risk profile of the fund, on a scale of five levels of risk, with one being the most conservative and five the most risky, this product is classified as profile three.

The coverage to achieve a maximum loss of 10% is applicable with a very high degree of confidence of 99%, this being the optimum level, since obtaining it at 100% would entail such high costs that it would not be efficient and would reduce the profitability sought.