Commerzbank enters retail market with China fund

Commerzbank is making its derivatives capabilities available via a retail portfolio for the first time, with the launch of the Commerzbank China Volatility Target fund.

The Ucits III fund is the first retail launch on the group’s Luxembourg platform. It is a long-only equity Sicav managed by Michael Wen and Edward Wang of China Asset Management, based in Beijing. Commerzbank then applies a derivatives overlay to the fund to keep it within its 20% annual volatility target. If the fund exceeds the target, the managers use a short position to reduce volatility, but if it undershoots the target, they implement a long futures position to add extra beta. China Volatility Target is structured as a high conviction portfolio of 30 to 60 stocks. The manager...