Fair prices, transparency, no restrictions
Traditionally, investors wishing to diversify their equity investments choose mutual funds. They relied on an established fund manager to continually look for the best-performing stocks in the market, thus offering real added value to investors. How ever, this system did not work as smoothly in practice as it did in theory. Only very good fund managers succeed in beating their benchmark index consistently. And mutual funds include front-end loads (selling fees) of up to 5 percent, plus annual management fees and other cost, which reduce overall returns.
1:1 tracking of indices
So, if it is so difficult to beat the benchmark, why not invest directly in the index? Deutsche Bank X-pert Certificates allow you to do so. Their price exactly tracks the performance of the index. The price of the certificate is determined by the ratio of the respective product.
The DAX trades at 4,000 points, a DAX-based
X-pert certificate with a ratio of 1:100 will
cost € 40.00. If the index rises to 5,000 points
the price will of the certificate will rise as well, to € 50.00.
This symmetric profile of opportunities and risks
works in the other direction as well: if the DAX drops
to 3,000 points the price of the certificate will fall
to € 30.00. Thus, X-pert Certificates ensure you
always achieve market performance.
Maximum transparency and liquidity
Investors must look up the daily value of their mutual funds. But with X-pert Certificates investors can calculate the value themselves. All they need to know is the current level of the underlying index and, in the case of foreign indices, the current exchange rate. Of course investors can buy or sell at any time between 8:00am and 10:00pm CET on any exchange trading day at a price based on the current index level. In addition, the index sponsors´ websites inform investors daily about the individual shares included in the index and their respective weightings.
No front-end loads and management fees
Indices are regularly recomposed according to certain criteria, such as market capitalisation or exchange turnover. However, this does not require the services of a fund manager, and therefore there are no management fees to be paid. With Deutsche Bank´s X-perts certificates, investors enjoy the full benefits of index funds - making the certificates much more cost effective. There is no front-end load or selling fee either. Buying and selling the certificates costs only a small bid/ offer spread in addition to the usual commission charged by custodian banks. In the case of some indices X-markets does not even charge a spread. An additional advantage of choosing an X-pert certificate based on a total return index such as the DAX is that investors will participate in the price performance of the index and will also benefit from continual reinvestment of dividends distributed by the companies included in the index.
Broad range of certificates - no fixed maturity
X-pert Certificates are available on all major indices, such as the DAX, the TecDAX or MDAX, the EuroSTOXX 50 or STOXX 50, the Dow Jones Industrial Average, the S&P 500 or the Nikkei 225. In addition, we have issued certificates based on the indices of the exchanges of Central or Eastern European EU accession candidates, Asian indices or on many EuroSTOXX sector indices. The broad range of our products allows investors to build a diversified global portfolio, tailor-made, at low cost and offering maximum efficiency. The time horizon is completely up to the investor; in contrast to many other certificates there are no fixed maturity dates for X-pert Certificates.