Commodity ETFs

8/13/2019 Commodity ETFs

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A Passion to Perform.

db x-trackersSimply buy the market

db x-trackers Commodity ETFs An Efficient, Transparent and Flexible wayto gain Commodity Exposure

MARKETING MATERIAL


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3 Introduction

3 Not all commodity indicesare the same

4 Examples: The benefits of theOptimum Yield rolling technology

6 db x-trackers Commodity ETFs

6 DB Commodity Booster LightEnergy Benchmark Index

6 A more efficient alternative to theS&P GSCITM Light Energy Indexbenchmark

8 DB Commodity Booster DJ-UBSCI SM Index

8 A more efficient alternative to theDJ-UBSCI SM Index benchmark

10 DB Liquid Commodity Index Optimum Yield Balanced

12 Important Information

Contents

2 | Contents


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Deutsche Bank has been recognised

as one of the largest providers ofcommodity indices and provides acomprehensive suite of investmentfunds linked to these indices.db x-trackers offers UCITS IIIcompliant commodity exposureby tracking three of thesecomprehensive indices. The trackedindices, reflecting the performanceof a wide range of differentcommodities, have consistentlyoutperformed their benchmark.

Not all commodity indices are

the same

It is important to note that not allcommodity indices are the same:major differences exist in the wayindex sponsors roll their futuresand weight the components of

their indices. These differencescan have a major impact on indexperformance so it is vital thatinvestors understand them.

First, roll returns: commodity returnsare not just generated from spotprice movement but also by rollyields. In backwardated markets(downward sloping futures curves)investors generate positive roll yieldsin the futures rolling process, incontango markets (upward slopingfutures curves) investors incurnegative roll yields in the futuresrolling process.

db x-trackers are Exchange Traded

Funds (ETFs) an index trackinginvestment solution from DeutscheBank. db x-trackers ETFs have beenavailable since January 2007.db x-trackers ETFs are listed on sevendifferent exchanges across Europe(Borsa Italiana, Frankfurt Xetra, ParisEuronext, London Stock Exchange,Zurich SIX SwissExchange) and Asia(SGX Singapore Exchange, HongKong Stock Exchange). db x-trackersETFs are supported by multipledifferent market makers. db x-trackersoffers a broad product range of ETFscovering various asset classes equity, bond, credit, money market,currency, commodity and alternativeinvestments like inflation or hedgefunds.

This document provides an

overview of the Commodity ETFsthat Deutsche Bank has developed.As this document only provides anoverview, potential investors shouldrefer to the prospectus for therelevant ETFs for more detailedinformation. Commodity ETFs maynot be suitable for all investors.Accordingly, potential investorsshould consider seeking professionaladvice from their financial advisorwhere appropriate.

The main route through whichinvestors typically access the assetclass is commodity indices. Theyprovide a diversified, easy andtransparent way to gain exposureto commodities.

Introduction

3Introduction |


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4 | Introduction

The traditional approach to commodityfutures rolling is to roll to the next

nearby futures contract, a methodemployed for example by theS&P GSCI Index.

However, over recent years therehas been a move away from a fixedrolling schedule to a more dynamicrolling procedure to address theunstable nature of commodityforward curves.

This approach is used by DeutscheBank Optimum Yield indices, whichanalyse the full list of tradable futurescontracts that expire in the next 13months to select the futures contractthat will maximise the roll return.The cost related to this more dynamicrolling procedure is reflected in theindex fee.

The graphs in the discussion boxillustrate the benefits of the Optimum

Yield rolling technology in bothsituations of upward and downwardsloping forward curves.

Examples: The benefits of the

Optimum Yield rolling technology

Contango markets

The premium of future pricesover spot prices is a reflectionof financing, storage and othercosts implicitly charged by themarket

The annualized costs implicit ineach futures curve are generallydifferent from contract tocontract as a consequence ofsupply/demand factors

For example if spot = 100, thenearest (1st month) future = 110and the farthest (12th month)future = 155, the nearest futurehas an implicit annualized costof 120 = (110100) x 12 and the

12th month future implies a costof (155100) x 1 = 55

When a market is in contango(see figures below), the indextakes a long position in thefuture contract (up to the 13thmonth future) with the lowestannualized cost

160

150

140

130

120

110

100

90

80

Contango example

1 2 3 4 5 6 7 8 9 10 11 12

spot = 100

F u

t u r e

p r

i c e

month 1 = 100

month 12 = 155

Tenor (nb months)


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5Introduction |

Backwardated markets

The discount of future prices tospot prices is typically a reflectionof short term supply disruption.The benefit of physical ownershipof the commodity more thanoffsets any financing, storageand other costs.

The annualized discount implicitin each futures curve, is generallydifferent from contract tocontract as a consequence ofsupply/demand factors for futuredeliveries

For example if spot = 100, the1st month future = 99 and the

12th month future = 70, the1st month future has an implicitannual discount of 12 = (10099)x 12 and the 12 month futureimplies an annual discount of30 = (10070) x 1

When a market is inbackwardation, the index takesa long position in the contract(up to the 13th month) with thehighest annualized discount

105

100

95

90

85

80

75

70

65

Backwardation example

1 2 3 4 5 6 7 8 9 10 11 12

spot = 100

F u

t u r e

p r

i c e

month 1 = 99

month 12 = 70

Tenor (nb months)


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The Deutsche Bank CommodityBooster Light Energy BenchmarkIndex (Light Energy Booster Index)is a commodity based, quantitativestrategy (optimum yield technology)benchmarked to the S&P GSCI TM

Light Energy. The strategy hasconsistently outperformed thebenchmark by an average annualised

return of 5.2% since 2002 1. TheDB Commodity Booster Light EnergyBenchmark Index has the samesector allocation as the S&P GSCI TM

Light Energy and it is a long onlyinvestment strategy. It comprises 24commodities, representing the fivebroad commodity sectors, i.e. energy,precious metals, base metals,agriculture and livestock. The BoosterIndex is available in USD and EUR.

A more efficient alternative to

the S&P GSCI TM Light Energy

Index benchmark

More efficient management ofroll returns due to the optimumyield technology outperformedthe benchmark by an averageannualised return of approx. 5.2%

since 2002 1

95% + returns correlation withthe benchmark index 1

Lower volatility than thebenchmark (Booster 17.82%vs. benchmark 19.19%) 1

6 | db x-trackers Commodity ETFs

TER Xetra Trading ISIN Bloomberg Reuters IndexExchange Currency Ticker RIC fee

0.95% DX26 EUR LU0411078123 XCBL GY XCBL.DE 0.80%

db x-trackers DB Commodity Booster Light Energy Benchmark EUR ETF

DB Commodity Booster Light EnergyBenchmark Index

1 Source: Bloomberg, Time Period: 31-Dec-01 to 20-Aug-09. For Purpose of comparison, S&P GSCI Light Energy

EUR Hedge after Cost Index has been created using same mechanism as DB Commodity Booster Light EnergyBenchmark EUR Index. Performance of the DB Commodity Booster Light Energy Benchmark EUR Index , prior tolive launch, is simulated and calculated net of Index fees. Performance of the db x-trackers DB Commodity BoosterLight Energy Benchmark EUR ETF will be lower than that of the Index due to Fund fees (see TER). Past performanceis not a reliable indicator of future results.

db x-trackers Commodity ETFs


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The chart below compares theperformance of the Deutsche BankCommodity Booster Light EnergyBenchmark EUR Index to the S&PGSCITM Light Energy EUR Index. 1

Bloomberg Index tickers

Benchmark: SPGCLETRBooster: DBCMSPLE

7db x-trackers Commodity ETFs |

Source: Deutsche Bank, base weights

450

400

350

300

250

200

150

100

50

0

Historical Performance of the Deutsche Bank Commodity Booster Light EnergyBenchmark EUR Index vs. the S&P GSCI TM Light Energy EUR Index

Index composition of the Deutsche Bank Commodity Booster Light EnergyBenchmark EUR Index

Dec01 Dec02 Dec03 Dec04 Dec05 Dec06 Dec07 Dec08

DB Commodity Booster Light Energy Benchmark EUR Index S&P GSCI Light Energy EUR IndexSource: Bloomberg, as of 20 August 20091 For Purpose of comparison, S&P GSCI Light Energy EUR Hedge after Cost Index has been created using same

mechanism as DB Commodity Booster Light Energy Benchmark EUR Index. Performance of the DB CommodityBooster Light Energy Benchmark EUR Index , prior to live launch, is simulated and calculated net of Index fees. Per-formance of the db x-trackers DB Commodity Booster Light Energy Benchmark EUR ETF will be lower than that ofthe Index due to Fund fees (see TER). Past performance is not a reliable indicator of future results.

15.96% WTI crude oil9.84% Wheat8.94% Corn7.14% Live cattle

6.49% Soybeans6.27% Brent crude oil6.13% Gold5.03% Aluminium4.86% Copper3.98% Lean hogs3.50% Sugar3.35% Natural gas2.44% Gas oil2.30% Heating oil2.05% Kansas wheat2.03% RBOB gasoline2.01% Cotton1.76% Coffee1.31% Feeder cattle1.26% Nickel1.18% Zinc0.81% Cocoa0.74% Lead0.61% Silver


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The Deutsche Bank CommodityBooster Index DJ-UBSCI SM

(DJ-UBSCI Booster Index) is arule based, quantitative strategy(optimum yield technology)benchmarked to the DJ-UBSCI SM.The strategy has consistentlyoutperformed the benchmark by anaverage annualised return of approx.6% since 2002 1. The DJ-UBSCIBooster Index has the same sectorallocation as the DJ-UBSCI SM and itis a long only investment strategy.

It comprises 19 commodities,representing five broad commoditysectors, i.e. energy, precious metals,base metals, agriculture and livestock.The Booster Index is available in USDand EUR.

A more efficient alternative to

the DJ-UBSCI SM Index benchmark

More efficient management ofroll returns due to the optimumyield technology

Outperformed the benchmark byan average annualised return ofapprox. 6% since 2002 1

95% + returns correlation withthe benchmark 1

Lower volatility than thebenchmark (Booster 17.09%vs. benchmark 18.53%) 1


0.95% DBZN EUR LU0429790743 XCBE GY XCBE.DE 0.80%

db x-trackers DB Commodity Booster DJ-UBSCI EUR ETF

DB Commodity BoosterDJ-UBSCI SM Index

1

Source: Bloomberg, Time Period: 31-Dec-01 to 20-Aug-09. For Purpose of comparison, DJUBS EUR Hedge AfterCost Index has been created using same mechanism as DB Commodity Booster DJUBS Index Performance of theDB Commodity Booster DJ UBSCI SM EURO Index, prior to live launch, is simulated and calculated net of Index fees.Performance of the db x-trackers DB Commodity Booster DJ UBSCI EURO ETF will be lower than that of the Indexdue to Fund fees (see TER). Past performance is not a reliable indicator of future results.


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The chart below compares theperformance of the Deutsche BankCommodity Booster DJ UBSCI SM

EUR Index to the DJ UBSCI SM EURIndex.


Benchmark: DJUBSTRBooster: DBCMDNTE


600

500

400

300

200

100

0

Historical Performance of the Deutsche Bank Commodity Booster

DJUBSSM

EUR Index vs. the DJUBSSM

EUR Index

Index composition of the DB Commodity Booster DJ-UBSCI EUR Index


DB Commodity Booster DJ UBSCI SM EUR Index DJ UBSCI SM EUR IndexSource: Bloomberg, as of 20 August 2009

For Purpose of comparison, DJUBS EUR Hedge After Cost Index has been created using same mechanism asDB Commodity Booster DJUBS Index Performance of the DB Commodity Booster DJ UBSCI SM EURO Index,prior to live launch, is simulated and calculated net of Index fees. Performance of the db x-trackers DB CommodityBooster DJ UBSCI EURO ETF will be lower than that of the Index due to Fund fees (see TER). Past performance isnot a reliable indicator of future results.

13.75% WTI crude oil11.89% Natural gas

7.86% Gold7.60% Soybeans7.31% Copper7.00% Aluminium5.72% Corn4.80% Wheat4.29% Live cattle3.71% RBOB gasoline3.65% Heating oil3.14% Zinc2.99% Sugar2.97% Coffee2.89% Silver2.88% Nickel2.88% Soybean oil2.40% Lean hogs2.27% Cotton


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The Deutsche Bank LiquidCommodity Index Optimum

Yield Balanced Total Return Index(DBLCI-OY Balanced Index) isintended to reflect the performanceof 14 commodities: WTI Crude Oil,

Brent Crude Oil, Heating Oil, RBOBGasoline, Natural Gas, Aluminium,Copper, Zinc, Gold, Silver, Wheat,Corn, Soybean and Sugar. TheDBLCI-OY Balanced Index is availablein USD and EUR.


0.55% DXSM EUR LU0292106167 XCBC GY XCBC.DE 0.80%

db x-trackers DBLCI OY BALANCED ETF

DB Liquid Commodity Index Optimum Yield Balanced

The chart below compares theperformance of the DBLCI OY Balanced Index to the DJUBS SM

Index.


Benchmark: DJUBSTROY Balanced: DBLCTRAE

600

500

400

300

200

100

0

Historical Performance of the Deutsche Bank Liquid Commodity Index Optimum Yield Balanced EUR Index vs. the DJUBS SM EUR Index


DBLCI OY Balanced Index DJUBS SM EUR IndexSource: Bloomberg, as of 20 August 2009

For Purpose of comparison, DJUBS EUR Hedge After Cost Index has been created using same mechanism asDB Commodity Booster DJUBS Index Performance of the DBLCI OY BALANCED Index, prior to live launch, issimulated and calculated net of Index fees. Performance of the db x-trackers DBLCI OY BALANCED ETF will belower than that of the Index due to Fund fees (see TER). Past performance is not a reliable indicator of future


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Index composition of the DB Liquid Commodity OY Balanced EUR Index

6.00% Aluminium7.88% Brent Crude6.00% Copper Grade A7.50% Corn

13.60% Gold7.88% Heating Oil7.88% Light Crude3.50% Natural Gas7.88% RBOB Gasoline3.40% Silver7.50% Soybeans7.50% Sugar #117.50% Wheat6.00% Zinc


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12 | Important Information

4) The underlying indices of theFunds are based on one or moreinvestment strategies which arebuilt on certain assumptions toachieve positive performance.Such assumptions may not workin certain market conditionsand the relevant Fund mayconsequently fail to deliverpositive performance. Potentialinvestors should fully understandand evaluate the characteristics,investment strategy and risks ofthe relevant index prior to makingany investment.

5) For Funds linked to an Optimum Yield Index, if the underlyingcommodity futures shift suddenlyfrom contango to backwardationor flatten before rebalancing, theoptimum yield mechanism mayperform negatively

Marketing Material Disclaimer

This document is intended fordiscussion purposes only and doesnot create any legally bindingobligations on the part of DeutscheBank AG and/or its affiliates (DB).Without limitation, this documentdoes not constitute an offer or arecommendation to enter into anytransaction. When making aninvestment decision, you should relysolely on the final documentationrelating to the transaction and notthe summary contained herein. DBis not acting as your financial adviseror in any other fiduciary capacitywith respect to this proposedtransaction. The transaction(s) or

products(s) mentioned herein maynot be appropriate for all investorsand before entering into anytransaction you should take stepsto ensure that you fully understandthe transaction and have made anindependent assessment of theappropriateness of the transaction in

1) The value of an investment in aFund may go down as well asup and past performance is notindicative of future performance.Investors in any of the Fundsshould be prepared and ableto sustain losses of the capitalinvested up to a total loss.

2) Investors in the Funds bear thecounterparty risk from the indexswap transaction with DeutscheBank AG. This risk is limited to amaximum of 10% of the FundNAV according to UCITS III rules.This means, in the event of a

default under the terms of theindex swap transaction withDeutsche Bank, the Funds willliquidate and investors couldlose up to 10% of the NAV ofthe relevant Fund. The NAV atthe time of default also maybe considerably less than theamount an investor originallyinvested depending on theperformance of the relevantunderlying index. Any potentialinvestor should thereforeunderstand and evaluate theDeutsche Bank counterpartycredit risk prior to making anyinvestment.

3) In addition to the counterpartyrisk set out in paragraph 2 above,an investment in the Fundsinvolve numerous other risksincluding among others, generalmarket risks relating to therelevant index, exchange raterisks, interest rate risks, inflationaryrisks, liquidity risks and legal and

regulatory risks. In addition,commodities markets may bemore volatile than other marketsin both the short and long term.The levels of the underlyingIndices can be influenced bymarket volatility and/or volatilityof the underlying assets.

Important Information

the light of your own objectives andcircumstances, including the possiblerisks and benefits of entering intosuch transaction. For generalinformation regarding the nature andrisks of the proposed transaction andtypes of financial instruments pleasego to www.globalmarkets.db.com/riskdisclosures. You should alsoconsider seeking advice from yourown advisers in making thisassessment. If you decide to enterinto a transaction with DB, you doso in reliance on your own judgment.The information contained in thisdocument is based on material we

believe to be reliable; however, wedo not represent that it is accurate,current, complete, or error free.Assumptions, estimates and opinionscontained in this document constituteour judgment as of the date of thedocument and are subject to changewithout notice. Any projections arebased on a number of assumptionsas to market conditions and therecan be no guarantee that anyprojected results will be achieved.Past performance is not a guaranteeof future results. This material wasprepared by a Sales or Tradingfunction within DB, and was notproduced, reviewed or edited by theResearch Department. Any opinionsexpressed herein may differ from theopinions expressed by other DBdepartments including the ResearchDepartment. Sales and Tradingfunctions are subject to additionalpotential conflicts of interest whichthe Research Department does notface. DB may engage in transactionsin a manner inconsistent with the

views discussed herein. DB tradesor may trade as principal in theinstruments (or related derivatives),and may have proprietary positionsin the instruments (or relatedderivatives) discussed herein.DB may make a market in theinstruments (or related derivatives)


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more information on DB CommodityETFs. These documents are availablefree of charge from Deutsche Bank,London Branch. The registeredaddress of Deutsche Bank AG,London Branch, is WinchesterHouse, 1 Great Winchester Street,London EC2N 2DB. Any direct orindirect distribution of this documentinto the United States, Canada orJapan, or to US persons or USresidents, is prohibited.

Index Disclaimer

Dow Jones, DJ, UBS

Dow Jones-UBS CommodityIndex SM are service marks of DowJones & Company, Inc. and UBS AG,as the case may be, and have beenlicensed for use for certain purposesby Deutsche Bank. The DeutscheBank Commodity Booster DJ-UBSCI SMEuro Index, which is based in part onthe Dow Jones-UBS CommodityIndex, is not sponsored or endorsedby Dow Jones & Company, Inc. orUBS Securities LLC, but is publishedwith their consent.

Standard & Poors, S&P andS&P GSCI are trademarks ofStandard & Poors Financial ServicesLLC (S&P) and have been licensedfor use for certain purposes byDeutsche Bank. The Deutsche BankCommodity Booster Light EnergyBenchmark EUR Index, which isbased in part on S&Ps proprietaryS&P GSCI Index, is not sponsoredor endorsed by Standard & PoorsFinancial Services LLC, but ispublished with S&Ps consent under

license. The S&P GSCI index is notowned, endorsed or approved by orassociated with Goldman Sachs & Co.or its affiliated companies.

discussed herein. Sales and Tradingpersonnel are compensated in partbased on the volume of transactionseffected by them. The distribution ofthis document and availability ofthese products and services in certain

jurisdictions may be restricted bylaw. You may not distribute thisdocument, in whole or in part, withoutour express written permission.DB SPECIFICALLY DISCLAIMSALL LIABILITY FOR ANY DIRECT,INDIRECT, CONSEQUENTIAL OROTHER LOSSES OR DAMAGESINCLUDING LOSS OF PROFITSINCURRED BY YOU OR ANY

THIRD PARTY THAT MAY ARISEFROM ANY RELIANCE ON THISDOCUMENT OR FOR THERELIABILITY, ACCURACY,COMPLETENESS OR TIMELINESSTHEREOF. DB is authorised underGerman Banking Law (competentauthority: BaFin Federal FinancialSupervising Authority) and regulatedby the Financial Services Authorityfor the conduct of UK business.

The Company (db x-trackers) isregistered with the LuxembourgTrade and Companies Registerunder number B-119-899.DB Platinum Advisors acts as themanagement company. Registeredoffice of db x-trackers: 49, avenueJ.F. Kennedy, L-1855 Luxembourg,Grand-Duchy of Luxembourg.db x-trackers is registered in theGrand-Duchy of Luxembourg as anundertaking for collective investmentpursuant to Part I of the law of20 December 2002 relating toundertakings for collective investment,

as amended. The Company qualifiesas an undertaking for collectiveinvestment in transferable Securitiesunder article 1(2) of the CouncilDirective 85/611/EEC of 20 December1985. Please refer to the relevantdb x-trackers full prospectus and anyrelevant simplified prospectus for

13Important Information |


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14 |


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Printedonenvironmentallyfriendlypaper.

November 2009Deutsche Bank AGD 60311 Frankf rt am Main

Further Product Information

Further product information on thedb x-trackers ETFs, including thesimplified and full prospectus areavailable on the website:www.dbxtrackers.com

Alternatively you can contact us inwriting, by telephone or by email onthe details provided below.

Deutsche Bank AGdb x-trackers TeamWinchester House1 Great Winchester Street4th Floor WH/04/HT18London EC2N 2DB

Hotline: 020 7547 1747

Phone calls will be recorded

E-Mail: [email protected]

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