Xtrackers by DWS launches ESG global government bond ETF

DWS launches fixed income ETF linked to new FTSE Russell ESG global government bond index
Index methodology aims to provide stringent ESG tilting using a newly developed, in-depth sovereign assessment system

Xtrackers by DWS has debuted an environmental, social and governance (ESG) global government bond exchange-traded fund (ETF) based on a comprehensive ESG sovereign bond assessment and weighting framework developed by FTSE Russell. The ETF’s index methodology aims to provide meaningful ESG tilting using an in-depth assessment system that draws upon 41 ESG indicators as well as broadly recognised external data points.

Xtrackers ESG Global Government Bond ETF has listed on the Deutsche Börse this morning and is due to list on the London Stock Exchange tomorrow. The ETF references the FTSE ESG Select World Government Bond Index - DM (FTSE ESG Select WGBI-DM). The index uses FTSE Russell’s established ESG framework for sovereign bonds with more stringent ESG tilts to overweight higher ESG performing countries and underweight lower ESG performing countries. It also incorporates exclusions for the lowest ESG performers and, in response to investor demand, countries not considered ‘free’ (see Notes to Editors).

ESG scores for each country are derived by evaluating each country’s performance across three ESG performance pillars (each with multiple sub-indicators):

Environmental performance: considers energy, climate, and resources
Social performance: considers inequality, employment, human capital, health, and societal wellbeing
Governance performance: considers corruption, government effectiveness, political stability, regulatory quality, rule of law, and voice and accountability

“The new Xtrackers ESG Global Government Bond ETF aims to provide enhanced ESG characteristics while maintaining attractive risk-adjusted performance metrics. The goal is to provide a depth of analysis that moves the market forward in terms of providing intelligent and nuanced ESG exposure,” said Simon Klein, Global Head of Passive Sales. “With this addition to our ETF suite, investors now have a diverse range of Xtrackers ESG exposures they can use, across equities and fixed income.”

The ETF has an annual all-in fee starting at 0.20%. GBP-hedged, USD-hedged and EUR-hedged share classes are also available (see Product Table).

Product Table

Fund Share Class	Listed	Listing Currency	Share Class Currency	ISIN	BBG Ticker	Jährliche Pauschalgebühr (%)
LongNameSCIcon	London Stock Exchange	USD	EUR	LU2385068163	XZWG	0,20%
LongNameSCIcon	Deutsche Börse	EUR	EUR	LU2385068163	XZWG	0,20%
LongNameSCIcon	London Stock Exchange	GBP	GBP	LU2385068247	XZWS	0,25%
LongNameSCIcon	London Stock Exchange	USD	USD	LU2385068320	XZUD	0,25%
LongNameSCIcon	Deutsche Börse	EUR	EUR	LU2385068593	XZEG	0,25%

Notes to Editors

The FTSE ESG Select World Government Bond Index - DM (FTSE ESG Select WGBI-DM) is designed to measure the performance of the countries included in the FTSE World Government Bond Index –Developed Markets (WGBI-DM) accounting for ESG exposures. The index is built upon the same ESG framework established for the FTSE ESG Government Index Series but with more stringent ESG tilts incorporating exclusions for those countries with relatively lower ESG performance. The index applies ESG criteria to the market capitalisation WGBI by tilting country ESG exposures relative to the base index, overweighting higher ESG performing countries and underweighting lower ESG performing countries.

ESG Scores: The FTSE ESG Select WGBI-DM is built upon the sustainability profile of the quantitative ESG risk assessment established in Beyond Ratings Sovereign Risk Monitor (SRM). The quantitative ESG scores on individual countries go back 20 years in history and are dynamically updated on a quarterly basis as and when new data is updated.

Application of ESG Scores: The index includes countries that have a ESG score that is greater than the 15th percentile of the WGBI, and removes countries that fall below the 10th percentile.

Designation as "Free": The index includes countries designated as "Free" by the Freedom House. Freedom House is a non-profit organisation, that publishes Global Freedom Scores through its annual "Freedom in the World" report.

Information on the index can be found at:

FTSE_ESG_Select_World_Government_Bond_Index_Ground_Rules.pdf (ftserussell.com)

About DWS Group

DWS Group (DWS) is one of the world's leading asset managers with EUR 859bn of assets under management (as of 30 June 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 3,500 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 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.

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.

Risk considerations