Deutsche Bank has launched its UCITS III compliant DB Platinum Commodity Harvest fund, which will be available in several European jurisdictions. The fund tracks the Deutsche Bank Platinum Commodity Harvest Index and aims to offer positive returns in both falling and rising commodity markets.

The fund provides daily liquidity for investors and is available for public distribution in Luxembourg, Germany, Italy, Switzerland, Austria and Spain.

"Following the weak performance of commodity markets in the last few months, investors are increasingly looking for investment strategies in this space that offer potential for positive returns even in falling markets," commented Manfred Schraepler, head of the Fund Solutions platform at Deutsche Bank, in a statement.

The fund will follow an investment algorithm which aims to monetise market inefficiencies in the commodity space by tracking the Deutsche Bank Platinum Commodity Harvest Index. The strategy is applied to 21 liquid commodities across the energy, metal and agriculture sectors. The index takes a buy-position and a sell-position in each of the underlying commodities and aims to buy cheap and sell expensive contracts in each of the 21 commodities. This happens in the following ways:

A long position is taken on the futures contract, offering the highest annualized discount or lowest annualized cost with respect to the first nearby, or next to expire, futures contract. The applicable contract is chosen through the "Optimum Yield" mechanism developed by Deutsche Bank. The maximum maturity for these contracts is 13 months.

A short position is entered into for the first nearby futures contract. The short position hedges any directional exposure and results in the market neutrality of the entire strategy.

This means that the strategy does not depend on the general direction of the commodity markets. It yields positive returns if the long position performs better than the short position, while the returns of the strategy are negative if the short position performs better than the long position.

The DB Platinum Commodity Harvest I1C-E offers a delta-one exposure to the Commodity Harvest strategy without the use of any leverage.

The DB Platinum Commodity Harvest I3C-E offers exposure to the Commodity Harvest strategy by employing a target volatility mechanism. This mechanism allows return opportunities to be boosted while keeping risk under control.

Both products were launched on 29 October 2008 and have a performance since launch of 5.62 per cent and 16.24 per cent for DB Platinum Commodity Harvest I1C-E and DB Platinum Commodity Harvest I3C-E respectively.

The retail share classes of the fund are also available to private clients through the advisory sales channels in the applicable jurisdiction.

Deutsche Bank’s wealth management division has client assets of approximately $253 billion, and employs a staff of over 4,200 across 91 offices.