Deutsche Asset & Wealth Management (DeAWM) has expanded its CROCI (Cash Return on Capital Invested) range of ‘real value’ investments with the launch of the DB Platinum IV CROCI Europe fund.
The new fund provides exposure to a concentrated portfolio of 40 stocks selected as having the lowest CROCI-derived ‘economic P/E’ from a broad basket of European large-cap stocks, with the fund re-balancing quarterly. It complements the 10 existing CROCI funds, including the CROCI UK fund, which was launched in October of last year, and the CROCI Euro fund, which provides focused exposure to Eurozone companies – in addition to Eurozone countries, the new fund also potentially includes exposure to companies from the UK, Switzerland and the Nordics.
CROCI funds are also available on the Japanese and US equity markets, on global stocks, with dividend tilts, and filtered for environmental, social and governance measures.
The CROCI methodology aims to assess the fundamental value of companies by making a series of systematic adjustments to corporate accounts to establish valuation metrics unhindered by accounting conventions. By establishing unique ‘economic price/earnings (P/E)’ ratios, and then ranking stocks, excluding financials, accordingly by their economic P/E, CROCI aims to identify companies for potential investment that are undervalued while avoiding the most over-valued stocks.
The CROCI US, CROCI Euro, CROCI World and CROCI Sectors funds are five-star rated by Morningstar, while the CROCI Japan fund has a four-star Morningstar rating1.
“Our CROCI strategies achieved net inflows of over Euros 4 billion in 20142, on the back of continued above-market performance. The CROCI fund range remains the easiest way for many investors to access the CROCI methodology, and I’m sure the new Europe fund will be a big success,” says Francesco Curto, Global Head of CROCI.
The fund has been launched with an institutional share class that has a total expense ratio (TER) of 0.51%. A retail share class is intended to be launched shortly.