DWS Enhanced Commodity Strategy Fund – Institutional Class (SKIRX)

Overview

This fund focuses on providing investors with exposure to the commodities market through derivative instruments rather than direct investments in physical commodities. It primarily invests in commodity-linked derivative instruments such as total return swap contracts, options, and futures contracts. These instruments are backed by a portfolio of fixed income assets, providing a balanced approach to commodity investment. By utilizing derivative instruments, the fund aims to capture the returns of commodity market assets, offering a unique investment solution that avoids the complexities and challenges of directly investing in physical commodities.

Products and Services

• Commodity-Linked Total Return Swap Contracts

  These are agreements to exchange the return of a specific commodity or basket of commodities for a floating or fixed interest rate. This allows the fund to gain exposure to commodities without the need to physically hold them, mitigating the risks and storage costs associated with direct commodity investments.

• Options and Futures Contracts

  Options give the fund the right, but not the obligation, to buy or sell a commodity at a predetermined price and date, offering flexibility and leverage in market movements. Futures contracts are agreements to buy or sell a commodity at a future date at a price agreed upon today, helping in hedging against price volatility and speculating based on predicted market trends.

• Portfolio of Fixed Income Instruments

  The fund backs its commodity-linked derivative investments with a diverse portfolio of fixed income securities. This foundation of stable and predictable income streams helps to counterbalance the inherent volatility of commodities, providing a more secure and balanced investment option.