Deutsche Asset Launches Multi-Factor Fund
New index tracking fund offers clients myriad exposure for one price.
Deutsche Asset Management announced the launch of its new Deutsche US Multi-Factor Fund, a mutual fund that leverages the investment strategy employed by its Deutsche X-trackers Russell 1000 Comprehensive Factor exchange-traded fund (ETF) (NYSE Arca: DEUS).
“Our goal at Deutsche Asset Management is to provide clients with flexible access to products and solutions across a wide range of investment opportunities,” said Brian Binder, President of Deutsche Funds and Head of US Product & Fund Administration. “Through deliberate, consistent and direct factor exposure, the Deutsche US Multi-Factor Fund’s objective is to potentially make a significant contribution to outperforming traditional market-capitalization weighted benchmark indices, while lowering risk possibilities and adding diversification to the portfolio.”
Deutsche X-trackers launched its factor ETFs suite with the release of DEUS alongside another multi-factor fund in November 2015.
“In our view, factor investing straddles the intersection of active and passive asset management,” said Fiona Bassett, Head of Passive Asset Management, Americas. “The new fund complements Deutsche Asset Management’s existing suite of products and showcases our ability to deliver the unique factor-based approach via an index fund to a broader scope of investors.”
Deutsche US Multi-Factor Fund tracks the Russell 1000 Comprehensive Factor Index, which is designed to capture exposure to large-cap US equities using five factors: quality, value, momentum, low volatility and size. The fund seeks exposure to the universe of stocks in the US equity market, while titling individual weights towards those proficient in all five factors, assembling the best team of stocks.
“We think this is an excellent way to get exposure to the ETF market for or clients without going in and buying shares in several separate ETFs,” said one retail trader. “ETFs are a hot sector right now and buying into several can be very costly – both in terms of price and compliance. Now, we can get our clients the best of both or make it a win-win proposition.”
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