Germany-based Deutsche Bank has launched a new exchange traded fund based on actual hedge funds, providing liquid, exchange-tradable access to the hedge fund asset class.
The hedge fund exchange traded fund (ETF), which is UCITS III compliant, is linked to the db hedge fund index — a proprietary Deutsche Bank index that captures core hedge fund strategies in a liquid and transparent format. Each strategy is reflected by a sub-index which is represented in the main index according to recognised industry asset weightings.
Stephane Farouze, global head of hedge fund derivatives at Deutsche Bank, said: The structure of the hedge fund managed account platform means that all the funds in the ETF index are subject to Deutsche Bank’s continuing daily risk monitoring process and that investors also have a higher level of transparency than with traditional hedge fund products.
For investors wanting access to hedge fund returns, this ground breaking ETF offers unprecedented transparency and as well as intraday liquidity compared to at best monthly or even quarterly liquidity for a traditional hedge fund investment.
Thorsten Michalik, head of db x-trackers, added: “This new product again demonstrates Deutsche Bank’s capabilities as the leading innovator in the European ETF space. For the first time, investors will have liquid, UCITS III access to the hedge fund industry. Market participants will also be able to base their financial products on the ETF, as Deutsche Bank will be the market maker and will offer two way prices on and off the stock exchange.”
