DWS Enhanced Commodity Strategy Fund - Class R6 (SKRRX)

Overview

The fund described focuses on investing in commodity-linked derivative instruments which are backed by a portfolio of fixed income instruments. Instead of directly investing in physical commodities, the fund seeks to gain exposure to the investment returns of assets that trade in the commodity markets through various commodity-linked derivative instruments. These instruments include contracts like commodity-linked total return swap contracts, options, and futures contracts, all of which have values based on specific commodities. This method allows the fund to participate in the commodities market indirectly, potentially reducing the risks and logistical challenges associated with holding physical commodities.

Products and Services

• Commodity-Linked Total Return Swap Contracts

  Through commodity-linked total return swap contracts, the fund is able to gain exposure to the returns of commodities without physically owning them. These swaps are agreements to exchange the gain or loss of a commodity's return for a fixed or floating rate payment over a specified period. This tool enables the fund to benefit from the commodity markets' performance while potentially mitigating direct exposure risks.

• Options and Futures Contracts

  Options and futures contracts are also integral parts of the fund's strategy to gain commodity market exposure. Futures contracts are standardized agreements to buy or sell a particular commodity at a predetermined price at a specified future date, while options provide the right, but not the obligation, to buy (call option) or sell (put option) a commodity at an agreed price within a particular period. These derivative instruments offer flexibility and leverage, allowing the fund to speculate or hedge against commodity price movements effectively.