Xtrackers by DWS adds unique Paris Aligned Benchmark ETFs to ESG offering

• First Paris-aligned ETFs to implement practical recommendations of Institutional Investors Group on Climate Change (IIGCC^[1]) 
• ETFs qualify as EU SFDR Article 9 funds
• Weighting concept result in climate metrics acting as key driver of company active weights

DWS is offering core exposure to eurozone and developed market equities in two next-generation environmental, social and governance (ESG) ETFs aligned with the objectives of the 2015 Paris Climate Accords.

LongNameSCIcon and LongNameSCIcon qualify under Article 9 of the EU’s Sustainable Finance Disclosures Regulation (SFDR). The ETFs are based on a framework aimed at reducing emissions in line with the objectives of the Paris Agreement on climate change using indices that are subject to the European Union's Paris Aligned Benchmark (PAB) regulation. Both new ETFs has listed on the Deutsche Boerse this morning and is due to list on the London Stock Exchange tomorrow. Listing on Borsa Italiana is planned for Monday, as well as further listing venues.

The ETF's underlying Solactive ISS ESG Net Zero Pathway indices provide a 50% reduction in carbon intensity versus an equivalent non-ESG market benchmark, and a 7% year-on-year ongoing decarbonisation pathway.

However, the ETFs aim to go further than this by additionally incorporating recommendations from the Net Zero Investment Framework Implementation Guide of the Institutional Investors Group on Climate Change (IIGCC). That means, according to the IIGCC recommendations the indices re-weight components according to carbon intensity, their commitment to Science Based Target Initiative (SBTI^[2]) and Task Force on Climate-related Financial Disclosures (TCFD^[3]) reporting standards, and on measures of 'green' revenues. The indices overweight companies through three distinct pillars: Adoption of Science Based Targets, high climate disclosures standards and mitigating climate change. As a result climate metrics are the primary driver of company active weight in the indices.

“These are the first Paris Aligned Benchmark ETFs to implement the recommendations from the IIGCC, and as such serve the needs of investors who increasingly want to align their investment portfolios with ambitious climate targets, but also play an active role in bringing about change at the corporate level,” said Simon Klein, DWS’s Global Head of Passive Sales. “By basing Xtrackers Net Zero Pathway ETFs on this robust, engagement-friendly indexing protocol, investors in Xtrackers ETFs can place their actions at the cutting edge of sustainable investment practices.”

The indices make extensive use of alignment assessments benchmarked to the UN Sustainable Development goals, both in the implementation of the 'do no significant harm' principle and in their assessment of green revenues.

The ETFs are designed to be competitive, with low annual all-in fees of less than 0.2%, and moderate tracking error against traditional benchmark indices.

Additionally, the IIGCC guide stipulates good practice on engagement and stewardship. DWS is a board member of IIGCC, contributed to the creation of the Net Zero Investment Framework across all asset classes and continue to support IIGCC to develop net zero methodologies. DWS is one of the few major asset managers committed to the Science Basted Target Initiative and was the first German asset manager signatory of the Net Zero Asset Managers initiative.

Product Table 

Name	ISIN	Ticker	Annual All-in Fee	Underlying Index	Dividend Policy	Fund Currency
LongNameSCIcon	IE000Y6L6LE6	XNZE	0.15%	Solactive ISS ESG Developed Markets Eurozone Net Zero Pathway Index	Accumulating	EUR
LongNameSCIcon	IE000UZCJS58	XNZW	0.19%	Solactive ISS ESG Developed Markets Net Zero Pathway Index	Accumulating	USD

 

About DWS Group

DWS Group (DWS) is one of the world's leading asset managers with  EUR 928bn of assets under management (as of 31 December 2021). Building on more than 60 years of experience, it has a reputation for excellence in Germany, Europe, the Americas and Asia. DWS is recognised by clients globally as a trusted source for integrated investment solutions, stability and innovation across a full spectrum of investment disciplines.

We offer individuals and institutions access to our strong investment capabilities across all major asset classes and solutions aligned to growth trends. Our diverse expertise in Active, Passive and Alternatives asset management – as well as our deep environmental, social and governance focus – complement each other when creating targeted solutions for our clients. Our expertise and on-the-ground-knowledge of our economists, research analysts and investment professionals are brought together in one consistent global Chief Investment Office (CIO View), which guides our investment approach strategically.

DWS wants to innovate and shape the future of investing: with approximately 3,600 employees in offices all over the world, we are local while being one global team. We are investors – entrusted to build the best foundation for our clients’ future.

Key risks

• Investors should note that the Xtrackers UCITS ETFs and ETCs are not capital protected or guaranteed and investors should be prepared and able to sustain losses of the capital invested up to a total loss.
• Shares in the Xtrackers UCITS ETFs which are purchased on the secondary market cannot usually be sold directly back to the relevant fund. Investors must purchase and redeem such shares on the secondary market with the assistance of an intermediary (e.g. a market maker or a stock broker) and may incur fees for doing so (as further described in the applicable prospectus). In addition, investors may pay more than the current net asset value of a share in a Xtrackers UCITS ETF when buying shares on the secondary market, and may receive less than the current net asset value when selling such shares on the secondary market.
• Investments in funds involve numerous risks including, among others, general market risks, credit risks, foreign exchange risks, interest rate risks and liquidity risks. The value of an investment in a Xtrackers UCITS ETF may go down as well as up and investors may not get back the full amount of their original investment.
• Investments in ETC securities will not accrue any interest and performance is subject to the deduction of the product fee.
•  Pricing of the ETC securities on the secondary market may be at a significant discount or premium compared to the Value per ETC Security (intrinsic value) published by the Issuer. Investments in Xtrackers ETCs involve numerous risks including but not limited to, general market risks relating to the relevant commodities, exchange rate risks, interest rate risks, inflationary risks, liquidity risks, and legal and regulatory risks.
• Movements in exchange rates can impact the value of your investment. If the currency of your country of residence is different from the currency in which the underlying investments of the fund are made, the value of your investment may increase or decrease subject to movements in exchange rates.
• For a full description of risk factors, please refer to the relevant prospectus.

Important Notice

This press release has been issued in the UK and approved by DWS Investments UK Limited. DWS Investments UK Limited is authorised and regulated by the Financial Conduct Authority. Any reference to “DWS” shall, unless otherwise required by the context, be understood as a reference to DWS Investments UK Limited including any of its parent companies, any of its or its parents affiliates or subsidiaries and, as the case may be, any investment companies promoted or managed by any of those entities.

Past performance is not a guide for future returns.

Xtrackers UCITS ETFs are all ETFs of one of the following platforms: Xtrackers, Xtrackers II or Xtrackers (IE) plc.

Xtrackers, Xtrackers II and Xtrackers (IE) plc are undertakings for collective investment in transferable securities (UCITS) in accordance with the applicable laws and regulations and set up as open-ended investment companies with variable capital and segregated liability between their respective compartments.

Xtrackers and Xtrackers II are incorporated in the Grand Duchy of Luxembourg, are registered with the Luxembourg Trade and Companies’ Register under number B-119.899 (Xtrackers) and B-124.284 (Xtrackers II) respectively and have their registered office at 49, avenue J.F. Kennedy, L-1855 Luxembourg. Xtrackers (IE) plc is incorporated in Ireland with registered number 393802 and has its registered office at 78 Sir John Rogerson’s Quay, Dublin 2, Ireland. DWS Investment S.A. acts as the management company of Xtrackers, Xtrackers II and Xtrackers (IE) plc.

This information is intended for informational purposes only and does not constitute investment advice, recommendation, an offer or solicitation. Any investment decision in relation to an Xtrackers ETF should be based solely on the latest version of the prospectus, the audited annual and, if more recent, un-audited semi-annual reports and the Key Investor Information Document (KIID), all of which are available in English upon request or on www.Xtrackers.com. In the case of any inconsistency with the prospectus, the latest version of the prospectus shall prevail.

© DWS Investments UK Limited 2022.