Launched through the bank’s db-X funds division, the fund draws on Deutsche Bank’s Cash Return on Capital Invested (CROCI) research to identify these dividend paying stocks and is called the DB Platinum CROCI Global Dividends Fund.
CROCI was developed by Deutsche Bank’s research team to overcome what it said are the “traditional difficulties in comparing company data between regions, industries and individual stocks”. It aims to identify stock selection opportunities hidden by traditional metrics.
The valuation takes into account money spent by companies in intangible yet influential areas, such as advertising or research and development. It also assesses potential liabilities – pension deficits, lease obligations and warranty commitments – typically excluded elsewhere.
As well as applying the CROCI methodology, the fund also implements additional filters to the MSCI World Index – an index which tracks 1,600 companies across 25 developed markets.
Deutsche Bank said the result is a smaller universe of companies “potentially offering sustainably above-average dividend yields. The methodology avoids those companies with the lowest cash returns, highest leverage and most extreme volatility”.
Alex McKenna, head of db-X funds at Deutsche Bank, said: “With equity markets moving sideways and global interest rates at historic lows, investors are showing a keen interest in dividends as a way of generating sustainable income.
“By combining the respected CROCI® methodology with filtering mechanisms that favour high dividend stocks, we’re confident we can offer real value to investors.”
