Tue, 27/11/2012 - 10:07
db-X funds, Deutsche Bank’s structured funds division, has launched a fund that gives investors US dividend-focused exposure using its proprietary CROCI stock selection methodology.
The DB Platinum CROCI US Dividends Fund provides returns linked to the CROCI US Dividends-Net Return Index, which aims to identify shares in the S&P 500 with above-average and sustainable dividend yields.
The strategy selects companies with sustainable dividend potential by excluding stocks paying zero and below-average dividends, as well as those with the lowest cash returns, highest financial leverage and highest price risk (volatility). It also applies additional constraints, such as excluding financial stocks and stocks with low liquidity.
The process then selects a maximum 40 shares with the most favourable price-to-earnings ratios under the CROCI (cash return on capital invested) methodology.
The launch comes on the back of the popularity of the DB Platinum CROCI Global Dividends fund, which has amassed USD85m in assets following its launch less than three months ago.
“There is clear demand from investors for dividend-focused strategies. This, together with the popularity of the CROCI Global Dividends funds, has encouraged us to launch a separate fund investing solely in US markets,” says Alex McKenna, head of db-X funds.
By taking into account a number of factors missed by traditional financial metrics (for example spending on R&D or advertising), the CROCI methodology is a respected alternative to traditional valuation techniques.
DB Platinum CROCI Global Dividends joins the existing dozen CROCI products offered by the db-X funds platform. Other such funds include CROCI US, CROCI World, CROCI Germany and CROCI Euro.
Due to continued interest in DB Platinum CROCI Global Dividends, db-X funds last month launched Euro- and Sterling-denominated share classes in the fund for retail investors, taking the total number of share classes available to 11.
DB Platinum CROCI US Dividends launches with a dozen share classes in Euro, Sterling and US Dollars aimed at suiting varying retail and institutional investors’ currency requirements. Like all db-X funds’ products, DB Platinum CROCI US Dividends is open-ended. Minimum investment is one share.
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