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Commerzbank Launches New Hedge Fund Index-Linked C

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FRANKFURT, Germany (–The latest in a long series of hedge fund index-linked certificates issued by Commerzbank Securities was listed on the Stuttgart stock exchange last week.

The Comas Unlimited Turbo Bull Certificate is the latest addition to the Comas Alternative Investment Strategies offerings that totals roughly 200 million euros (US$224 million). The Turbo Bull gives leveraged exposure to the performance of a Commerzbank Securities-sponsored hedge fund index. That index, the Comas 25 Absolute Return Euro Index, is linked to the performance of two funds of funds run out of the firm’s New York office.

The leveraged exposure that Commerzbank provides on the certificates varies between three and four times the exposure to the index. According to officials, the Comas Absolute Return Strategy has performed well in the last 12 months, with extremely low volatility of 1.8% annualized standard deviation and little or no correlation to equity and bond markets.

Commerzbank started offering the hedge fund-linked notes to Germans in 2000. COMAS-1 was the first hedge fund vehicle designed by the firm for individual and family-office investors rather than its usual institutional clientele . Commerzbank has structured its offerings in such a way that Germans can invest in hedge funds in line with current regulation that essentially prevents direct investment in hedge funds.

The rules could change, though, as German legislators decide whether to allow direct investment in hedge funds.The German Finance Ministry released information on The Investment Act of 2003, which combines the regulations for investment companies and those concerning the sale of foreign investments and applies it to all investment funds in Germany. More specific to hedge funds, the law, announced earlier this month, makes German and European hedge funds accessible to both retail and institutional investors with few restrictions Previous HedgeWorld Story.

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