Strategy indices – Clever and transparent implementation of professional investment strategies
Strategy indices not only reflect the average performance of different underlyings but also implement investment strategies in a systematic and transparent manner, making them tradable for all investors via the respective certificates. Each of these index products tracks a recognized or innovative investment strategy, either with the goal of outperforming the overall market as a benchmark or to offer investors the ideal risk/return profile for their investments. These may be strategies that follow successful seasonal price trend patterns like the well-known “sell in May and go away” concept successfully implemented in the DAXplus® Seasonal Strategy.
Investors can earn money on declining share prices with the ShortDAX®, which tracks DAX® performance in the opposite direction. For example, if the DAX® falls by five percent on a given day, the ShortDAX® rises by this amount. Other indices, like the LevDAX®, react with a predefined leverage factor on certain share price movements. The LevDAX® is linked to the movements of the DAX benchmark index with a leverage factor of two.
Any movement on the DAX® results in double the movement on the LevDAX®, in the case of both rising and falling prices.
With DAXplus®, Deutsche Börse has established an index family for strategy indices with different strategic approaches, for example DAXplus® Covered Call or DAXplus® Protective Put, which are both based on well-known options strategies. On the basis of positive, neutral or negative market expectation and the volatility of the options’ underlying, the investor can enter positions that serve to hedge the underlying.
The indices DAXplus® Minimum Variance and DAXplus® Maximum Sharpe Ratio are based on the portfolio strategy for which Prof. Harry M. Markowitz was awarded the Nobel Prize. The core thesis of this theory states that the risk of an efficient portfolio is lower than the average risk of the individual securities.
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