Fund Management

Deutsche Asset & Wealth Management Launches Dollar, Euro Share Classes For Japan Fund

Tom Burroughes Group Editor 21 June 2013

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Deutsche Asset & Wealth Management has launched US dollar and euro-hedged share classes on the CROCI Japanese equity fund, the firm, part of Germany’s biggest bank, said yesterday.

The DB Platinum IV CROCI Japan fund, which has a top "5-star" rating from Morningstar based on performance relative to peers, focuses on large-cap Japanese stocks. The fund is re-balanced monthly and consists of a portfolio of 30 Japanese large caps from the Topix 100 Index, excluding financials.

Cash Return on Capital Invested – CROCI - is a proprietary equity valuation process developed by the German bank to identify stock selection opportunities that would not be revealed through analysis based on traditional accounting metrics.

“Bearing in mind the recent market drawdown and uptick in volatility, investor interest in Japanese equity has soared over the past three quarters on the back of a rapidly-rising stock market. But foreign investors also have to be mindful of a depreciating yen, which is why currency-hedged exposure is so important,” said Alex McKenna, Deutsche Asset & Wealth Management’s head of systematic funds.

The CROCI methodology applies a consistent set of adjustments to regular accounting data to convert it into more meaningful standardised corporate economic data. The result is a more realistic assessment of disparities between current share price and fair value, which can then be used as the basis for defining which companies to take long positions in, the bank said.

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