Deutsche offers Japan and Far East products

Deutsche Bank is to launch two products offering exposure to Japanese and Far Eastern markets, with full capital protection. The Protected Nikkei and Protected Far East (ex Japan) preference shares will be available to professional investors with a minimum of 50,000 to invest.

Deutsche expects the shares to be held primarily in discretionary portfolios, mutual funds and pension funds, including self-invested personal pensions.

Protected Nikkei is designed to appeal to investors looking to lock in gains made on their existing Japanese investments, while retaining enhanced exposure to the Nikkei 225 index. The investment offers 165% of index growth, measured at maturity. The shares will redeem after six years, on June 14, 2012.

Protected Far East (ex Japan) is aimed at bullish investors trying to protect gains, while retaining exposure to the region. The shares offer 130% of the growth of the index basket, also over six years.

The basket is constructed with reference to Bloomberg country capitalisation weightings: 10% Singapore, 10% mainland China, 20% Taiwan, 20% South Korea and 40% Hong Kong. The maturity date for the shares is June 9, 2012.

The products are being launched after three months of intensive research by Deutsche, says Sam Forster, director and head of UK retail. “We bench-tested a lot of ideas and there were two trends we picked up on,” he says.

“Investors want profit protection but they also want to retain their exposure to the markets. We found a lack of clarity in the other products out there. The UK professional market wants good access to products that suit their needs.”

Forster adds that Deutsche intends to launch a similar product next month.

American-style call options will provide participation in the indices and capital protection will be delivered by Deutsche’s balance sheet, says Forster. The products also has the advantage of having no exposure to currency risk.

Factsheets for the new products are being circulated, prior to the share sale on June 9. The issue price of the shares, listed on the Channel Islands Stock Exchange, will be 1,000. Deutsche Bank has more than €1trn (680bn) in assets and offers financial services in 73 countries.