Deutsche Bank launches full suite of inflation indices
Deutsche Bank has launched a suite of inflation indices to track inflation in both the developed and developing world. The db Liquid Inflation indices offer investors the opportunity to choose their inflation exposure by region - Global, G10 or EM - allowing them to hedge their inflation risks according to their specific requirements.
Access to inflation hedging has often been difficult for investors. Inflation linked bonds have become increasingly popular as a way to protect purchasing power for individuals and institutions alike, demonstrating impressive performance across business cycles. The db Liquid Inflation indices aim to provide convenient access to this asset class in a liquid, transparent and cost efficient manner.
The three indices making up the new suite are:
* db Liquid Inflation Index Global tracks the total return performance of a basket of liquid inflation linked sovereign and quasi-sovereign bonds issued by both the major developed countries and the key developing (EM) countries
* db Liquid Inflation Index (G10) measures the total return performance of the inflation linked sovereign bonds issued by major developed countries.
* db Liquid Inflation Index (EM) reflects the total return performance of inflation linked bonds in key developing emerging market countries.
Michele Faissola Global Head of Rates commented, “Inflation continues to be a major concern for investors throughout the world and these indices will facilitate access to this rewarding and often under-allocated asset class for our clients.”
Clients can access the indices via variety of products including notes, swaps,delta-1 certificates.
The indices are total return indices, with total returns calculated as the sum of price changes, gain or losses on repayments of principal and the coupon received or accrued. Countries included in the indices are:
* G10: Australia, Canada, France, Germany, Greece, Italy, Japan, Sweden, UK and US
* EM: Poland, Brazil, Chile, Mexico, Uruguay, Israel, South Africa, Turkey, South Korea
* The Global index is made up of a combination of the two, weighted with 85% exposure to the G10 index and 15% to the EM.
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