DWS Scudder, the U.S. retail arm of Deutsche Bank’s Asset Management division (DeAM), today announced the launch of two open-end mutual funds designed to deliver principal protection, capital appreciation and consistent income for retirees as well as investors preparing for retirement.
DWS LifeCompass Income is a unique investment that provides a protected fixed dollar distribution, diversified equity and fixed income market exposure along with the potential for capital appreciation to allow investors to plan retirement with the certainty of a fixed dollar stream investment. DWS LifeCompass Protect combines capital protection with the daily lock-in of fund gains, diversified equity and fixed income market exposure and the potential for capital appreciation to provide a unique investment opportunity. Class A, C, S and Institutional shares of each fund will be offered through financial advisors and institutions.
“As investors approach and enter retirement shifting their investment focus to preserving wealth while still seeking capital appreciation, they are finding that not all traditional products meet their needs,” said Doug Beck, a Managing Director and Head of Product Management at DWS Scudder. “Traditional income products such as CDs and money market funds may not offer high enough returns to protect investors from inflation and taxes eroding their wealth, while other income solutions such as variable annuities can be complicated, illiquid and more expensive. The multi-faceted goal of simultaneously providing growth and protection is something few products have addressed -- until now.”
DWS LifeCompass Income Fund is an asset allocation fund designed for investors seeking a steady cash flow. DWS LifeCompass Income seeks to provide regular distributions with the potential for capital appreciation as a secondary objective. Investors will receive a fixed-dollar distribution equal to an 8.25% annual yield based on the fund’s initial share price of $10. Distributions are made twice a year and the fund is structured to target its objectives over a ten year investment horizon.
The fund’s ability to provide regular distributions is protected by a third party financial warranty with Merrill Lynch Bank USA that helps assure shareholders receive periodic distributions as well as the return of at least a portion of their principal at maturity.
DWS LifeCompass Protect Fund is an asset allocation fund with a 10-year maturity. While the fund is designed to protect principal – it simultaneously seeks to limit down-side risk and lock in gains on a daily basis. The fund’s features work in tandem to provide potential protection against wealth erosion due to market corrections, inflation and taxes. At maturity, shareholders will be able to redeem shares at the highest net asset value (NAV) of the fund, the “Protected High NAV”. The fund has entered into a third party financial warranty with Merrill Lynch Bank USA to help assure that shareholders will receive an amount at least equal to the “Protected High NAV” on the maturity date. The fund also offers equity market exposure essential to investors seeking long-term capital appreciation.
To provide the capital appreciation and protection that DWS LifeCompass Protect offers and the regular distributions that DWS LifeCompass Income provides, both funds use a two-pronged, proprietary quantitative asset allocation strategy that allocates assets between an active component and a reserve component:
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The active component consists of a managed portfolio of global equity index futures contracts and exchange traded funds to potentially provide capital appreciation and generate distributions; and |
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The reserve component consists of a managed portfolio of US government securities, as well as the DWS Short Duration Plus Fund, designed to potentially provide capital protection. |
The funds are managed by Robert Wang, William Chepolis and Inna Okounkova. Wang and Chepolis are Managing Directors and Okounkova is a Director. Wang and Okounkova are portfolio mangers in DeAM’s Quantitative Strategies Group.
The funds’ investment manager is Deutsche Investment Management Americas (“DIMA”).
These two funds also complement a recently launched series of target date funds, ranging in maturity from 2015 to 2040, as well as a perpetual LifeCompass Retirement Fund.
DWS Scudder
DWS Scudder is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
About Deutsche Asset Management
With approximately $761.1 billion in assets under management globally (as of 30 June 2007), Deutsche Bank’s Asset Management division is one of the world's leading investment management organizations, not just in size, but in quality and breadth of investment products, performance and client service. The Asset Management division provides a broad range of investment management products across the risk/return spectrum.
About Deutsche Bank
Deutsche Bank (NYSE: DB) is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With 75,140 employees in 75 countries, Deutsche Bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people.