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3 Year Capital Protected CLIP Note
Summery terms
Product: 3 year Capital Protected Commodity Linked Individually Capped Performance Notes (the “ Notes ”)
Minimum Investment amount: USD 10,000 minimum with multiples of USD 1,000 thereafter
Nominal Amount: USD 1,000 per Note.
Investment Period: 3 years
Reference Index/Market: UK and US Markets
Capital Protection: 100% capital protection from Deutsche Bank AG, London branch if Notes are held until maturity (3Years), achieve through a Sharia compliant Mechanism explained in the prospectus
Valuation: Weekly
Redemptions: On a monthly basis.
Redemption fee : AED 250
Business Day: Working day in London , UK , and New York , US
Annual Management Fee: NIL
Upfront fee: 1% of the subscription amount
Issuer : Deutsche Bank AG, London branch
Sole Distributor: Dubai Islamic Bank (DIB)
Administrator: Ryland Gray
Sharia Advisor: Fatwa & Sharia Supervisory board of Dar Al Istithmar , London .
Product Features:
Investment Universe: The Fund invested in four prime self storage properties in Illinois and one prime office property in New Jersey.
Fund Type: Closed-ended Fund
Fund Launch Date: June 2005
Investment Details
Total Portfolio Value: USF 145 million
Total Equity Offering
(Fund Size): US$ 35 million
Minimum Investment: US$ 100,000 per investor
Holding Period: 3 -5 years
Expected Return: 8.00% p.a. distributed semi-annually
Expected IRR: 10.60%
Base Currency: US Dollars
Investment Managers
Fund Manager: Dubai Islamic Bank PJSC, Dubai
Asset & Property Manager: Investcorp, Bahrain
Sharia Advisor: Dubai Islamic Bank PJSC, Dubai
Exclusive UAE Distributor: Dubai Islamic Bank PJSC, Dubai Profit Mechanism : Performance will start from the trade date and last for a period of Three years Year1 : 10% Profit Guaranteed, achieved by way of a Sharia-compliant mechanism approved by the Sharia Advisor Year2: 8% maximum potential profit expected Year3: 8% maximum potential profit expected Underlying Basket (Based on 5 commodities): Aluminum : 20% Copper : 20% Gold : 20% WTI crude Oil : 20% Zinc : 20%
Investment Objectives:
- To diversify investment portfolio, you wish to extend your investments to a further asset class “Alternative Investments” or to increase your exposure to the commodity asset class.
- USD denominated investment for 3 years.
- A reasonable increase is expected in the prices of the five Note commodities over the tenor of the Note.
- The Note is capital secured through adoption of a Sharia-compliant mechanism approved by the Sharia Advisor.
- The Note has a nominal value of USD 1,000 per Unit and a 3 years maturity. The Note is linked to a basket of 5 commodities. The Note will pay an annual return from the trade date until maturity. A guaranteed return of 10% at the end of year 1, achieved by way of a Sharia-compliant mechanism approved by the Sharia Advisor, will be paid followed by a potential return of up to 8.00% at the end of each of years 2 and 3, depending on the performance of the basket on the yearly valuation dates since launch. For each commodity, which may have decreased in the value since the launch, the actual percentage decreased since launch will be included in the calculation of the annual return for years 2 and 3, while a positive performance will be included, with a cap of 8.00%. The values so calculated will then be aggregated to produce a net percentage return on all 5 commodities in the Underlying Basket. Every single commodity is equally weighted and the performance is individually capped at 8.00% in the calculation of the average performance of the basket. The return is paid to investors every year on each Return Payment Date.
DB Commodities & investment outlook: Source: Deutsche Bank Commodities Outlook 2006 – 13 January 2006
- Long term USD downtrend, implies that USD commodity prices should increase.
- Increasing acceptance of commodities as an alternative asset class.
- Due to strong economic growth, significant increase in the medium to long term demand for commodities is expected.
- Strong global growth, little spare production capacity, geopolitics and persisting weather risks are expected to skew prices to the upside.
Deutsche Bank AG
Deutsche Bank AG, London branch is the Issuer of the 3 years Capital Protected Commodity Linked Individually Capped Performance Notes. Deutsche Bank, founded in 1870, is a banking institution and a stock corporation incorporated under the laws of Germany. The Bank has its registered office in Frankfurt am Main, Germany. Deutsche Bank is the parent company of a group consisting of banks, capital market companies, fund management companies, a property finance company, installment financing companies, research and consultancy companies and other domestic and foreign companies. Deutsche Bank has a Standard & Poor’s AA- credit rating. [For the financial year of 2005 Deutsche Bank reported Income before income tax expense of € 6.1 billion an increase from € 4.0 billion in 2004. Giving Deutsche Bank a pre-tax return on average active equity of 25% in 2005 – a substantial improvement over 16% in 2004. Net income for 2005 increased 43% to € 3.5 billion compared to € 2.5 billion in 2004, and diluted grew 53% to € 6.95.]
Ryland Gray
Ryland Gray specializes in the delivery of flexible, accurate and reliable financial processing, supporting institutions who in turn manage a wide variety of group investment arrangements.