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The lights are going out for Ratebuster

DWS is to close its Ratebuster product in April 2006 and head of retail Andy Clark is “turning out the lights” on the firm’s retail operation.

Ratebuster was launched in March. It has performed poorly and is expected to return even money on an initial investment.

At launch, Ratebuster targeted annual returns of 7.75 per cent by investing the interest accrued from depositing the money in securities.

Deutsche Bank backed the product but Aberdeen has decided to stop offering it after buying DWS from Deutsche in August. The fund took over 60m at launch.

DWS is writing to advisers and their clients to tell them about the closure. The three-day capital security window on the fund, where investors can redeem their original investment without penalty, runs from 2pm on October 10 to 2pm on October 13.

At launch, Clark said that the worst-case scenario would be that investors would only get their money back and said the fund’s Deutsche backing should reassure investors. He admits that he is disapp- ointed with the product’s performance and to be leaving DWS after three years.

Clark says: “Performance has not been great. We were wrong-footed by the dollar but nobody has lost any money, which is the great thing about Ratebuster.

“I now have three weeks to turn the lights off here before handing the keys over to Aberdeen.”

Miton Investments fund of funds manager Sam Liddle says: “I think that the concept was fine but the execution was not. The unit price is still around 1 – what it launched at – and I was going to pull my money out anyway. They just bet against the dollar and it did not work.”

An Aberdeen spokeswoman says: “Ratebuster is a bank- ing product rather than a fund management product and therefore it does not sit within the Aberdeen prod- uct range.”

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