|
Deutsche Bank Redeems Ben Graham Notes
August 23, 2011
While Benjamin Graham’s deep value strategy for selecting stocks lives on, exchange-traded notes (ETNs) that attempted to mimic him won’t.
Deutsche Bank plans to repurchase three ELEMENTS ETNs linked to the Benjamin Graham indexes, giving investors a final cash payment on August 26. The repurchase valuation date is August 23 and the notes will cease trading on August 25.
The DB ETNs are:
• ELEMENTS Benjamin Graham Total Market Value Index-Total Return ETN (NYSEArca: BVT)
• ELEMENTS Benjamin Graham Large Cap Value Index-Total Return ETN (NYSEArca: BVL)
• ELEMENTS Benjamin Graham Small Cap Value Index-Total Return ETN (NYSEArca: BSC)
Despite respectable performance over the past three-years, the Ben Graham notes remained obscure throughout their existence and never attracted significant investment assets. As of mid-year 2011, the combined ETNs had less than $5 million in total assets. The notes were originally launched in August 2008.
ETNs are debt instruments linked to the performance of a single asset, security or index. While they share many of the same characteristics as exchange-traded funds (ETFs), they are not the same. ETNs carry credit risk to the financial institution(s) issuing them. If the ETN issuer becomes insolvent or goes bankrupt, the ETN can deviate from its investment objective and possibly become worthless.
Deutsche Bank manages 30 other U.S. listed ETNs with around $1.27 billion in assets. |
