Deutsche Bank Certificate on the Croci Euro Total Return Index
Deutsche Bank uses the Croci model. This is a respected strategy among investors. It looks for undervalued stocks and uses an “economic” P/E ratio to select them. The abbreviation Croci means “Cash Return on Capital Invested”.
Classic vs. economic P/E
There is the following difference to the classic P/E: The strategists at Deutsche Bank comb through the balance sheets of the companies. They adapt the annual reports in such a way that the P / E ratio can be compared between regions and sectors. The procedure is necessary because the balance sheet is not always the same: In some cases, different accounting standards lead to deviations. In other cases, certain assets and liabilities are not included.
If you look at pharmaceutical and biotech companies, they spend a lot of money on research and development and have numerous patents. These things play a key role in the Croci model. The “economic” P/E is therefore in many cases more meaningful than the classic P/E. Deutsche Bank applies the Croci strategy to numerous regions and markets.
How to invest in Croci
The Croci Germany certificate on DB CROCI Germany TR (WKN DB0WKS/ISIN DE000DB0WKS8) develops in a 1:1 ratio like the underlying Croci Euro Total Return Index. The paper was issued on August 16, 2004. 30 percent of the Croci-Euro-Index consists of top German companies. These include Adidas, BASF, Bayer and Continental. However, the heavyweights are French companies such as Atos, Danone, Kering, LVMH and Michelin. The certificate has no fixed term. The management fee is 1.30 percent.