Dresdner Bank’s investment banking unit, Dresdner Kleinwort, and its private bank Kleinwort Benson, plan to launch two new equity volatility tracker funds in the next month. The funds will be listed via Dresdner Kleinwort’s Gresham defined funds platform, which it launched last year.
The new funds, called Dresdner equity volatility arbitrage (Deva) 80 fund and DEVA 90 alpha fund, will offer returns on equity volatility through an undertaking for collective investments in transferable securities (Ucits III) compliant structure. They will be sterling-denominated, open-ended investment companies (OEICs) based in the UK and authorised by financial watchdog the Financial Services Authority. The OEICS will be listed on the London Stock Exchange, offering investors daily liquidity.
The Deva 80 and Deva 90 alpha funds aim to achieve absolute returns of 4% and 9% per year, respectively, above the Bank of England base rate. They expect to do this with relatively low levels of volatility – 2-3% for the Deva 80 fund and 4-5% for the Deva 90 alpha fund. Both funds intend to have an upwardly adjusted capital protection of 90% and 80%, accordingly, on the highest net asset value achieved on launch and at monthly rebalancing dates.
“These funds offer investors the opportunity to benefit from the transparent charges, daily dealing and ease of administration that they would expect from a UK-based OEIC product, while enjoying exposure to an asset class that has previously been unavailable to many investors,” said Andy Halford, London-based head of structured products at Kleinworth Benson.
The Gresham defined funds platform was introduced by Dresdner Kleinwort in the third quarter of 2005, providing a number of structured products for institutional and asset management clients based on a wide variety of asset classes.
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