D.A.B.
The D.A.B. (Dynamic Allocation Bond), created by Abaxbank, is a dynamic investment in bonds, index linked to the performance of a diversified basket of mutual investment funds.
D.A.B.s are capable of combining guaranteed repayment of capital at maturity (typical of bonds) with the advantages of a dynamic management model. Furthermore, they also guarantee the possibility of obtaining the same performance as a derivative – like options – eliminating volatility costs, and allow investors to participate in a 100% increase in the performance of the benchmark index.
The repayment of capital and guaranteed minimum return are made possible as a result of the use of CPPI techniques. D.A.B. issues are based on a mix of mutual investment funds – managed by a selection of expert asset management companies - which are dynamically reshuffled. To optimise returns for investors, the percentages of the equity, bond and monetary components of the baskets are subject to non-discretionary reallocation, based on market performance.