Risk considerations
Investors should note that the Xtrackers ETFs & ETCs are not capital protected or guaranteed and investors in each Xtrackers ETF or ETC should be prepared and able to sustain losses up to the total capital invested. The value of an investment in an Xtrackers ETF or ETC may go down as well as up and past performance does not predict future returns. Investment in Xtrackers ETFs or ETCs involve risks. For a list of related risks please click on the Risks and Terms tab.
In the 2030 Agenda for Sustainable Development[1], the United Nations (UN) has set out an action plan that includes the most important global issues for a more sustainable future. These range from fighting poverty and hunger to combating climate change and creating a peaceful and just society. To this end, the UN defined 17 goals to address common global challenges: the Sustainable Development Goals (SDGs). 
Learn more about the UN Sustainable Development Goals
SDG funds are thematic funds specifically targeted at companies that are associated with a positive contribution to meeting the UN Sustainable Development Goals.
Xtrackers and MSCI have developed a state-of-the-art range of SDG-aligned equity indices positioned to provide a unique range of passive exposures. This gives investors the opportunity to invest directly in companies that can contribute to the Sustainable Development Goals (SDGs)[2].
Xtrackers ETFs making sustainable development goals investable: from January 2023 (press release january 23) investors have access to a total of seven different exposures - both single and multi-theme SDGs.
The UN Sustainable Development Goals include 169 targets and 231 indicators to measure progress towards the goals. Like the 2030 Agenda, the SDGs cover a wide range of sustainability issues. Some of the accompanying targets are very specific and quantifiable, while others are formulated more broadly and qualitatively. Companies can contribute to the achievement of the SDGs by producing products or providing services that contribute to the achievement of one or more of the 17 goals as well as by aligning their operations, for example with respect to labour rights and health and safety measures. For each SDG, more specific sub-targets have been defined. While some targets are aimed at governmental policy making, our experts estimate that companies can contribute to around half of these targets through their products and services as well as corporate behavior (source: DWS calculations).
Xtrackers provides the world’s first product range offering investors granular (i.e. single theme SDGs) access to companies associated with a positive contribution to SDGs. Investors can choose between products that relate to multiple SDGs[3] or various single SDGs, which are combined with a thematic approach. In addition all company stocks in the equity funds are subject to an ESG Screened Methodology, including an ESG exclusion criteria.
Xtrackers ETFs track indices which combine MSCI SDG Alignment (75% index weight) with the MSCI thematic engine (25% index weight). Single-theme solutions to drive SDG alignment might be:
The selection of company stocks in Xtrackers SDG ETFs is based on the MSCI ACWI IMI universe comprising of small, mid and large capitalisation stocks from global markets deemed investible by MSCI. The selection combines ESG data, thematic revenue and SDG alignment data from the index provider MSCI. The following criteria are taken into account:
SDG investments can be understood as a form of thematic investing. The fully systematic, methodology powering the MSCI SDG indices provides thematic exposure to companies relevant to achieving the Sustainable Development Goals. The focus is on directing capital - towards companies that are well positioned to positively contribute to the current efforts by the society towards achieving those Sustainable Development Goals.
Xtrackers SDG ETFs use the MSCI methodology that links the SDGs to concrete and actionable sub-themes by using SDG aligned revenue metrics. The themes are divided into social categories and environmental categories. An SDG target can achieve environmental and/or social characteristics from one or more sub-themes.
Xtrackers SDG ETFs do not have sustainable investment as their objective but do promote environmental and/or social characteristics and therefore qualify as a financial product subject to the disclosure requirements of Article 8(1) of SFDR. This is what you should know about the companies invested in by such Xtrackers SDG ETFs:
Very few companies have their business model entirely based on contributing to the SDG s, but certain companies have a majority of their activities aligned. Xtrackers SDG ETFs aim to focus on these companies.
The indices also aim to exclude companies with poor sustainability metrics or companies whose behaviour is harmful to the achievement of the SDGs, even if some of their activities could be considered aligned with the achievement of these goals.
Sustainable Investment metrics (SI) as per the EU Sustainable Finance Disclosure Regulation (SFDR) are useful to assess the share of sustainable investments achieved by the ETF. Xtrackers SDG ETFs disclose under Art. 8 of SFDR.
Thematic investing is becoming increasingly important for investors and can be a useful way to invest directly in companies that are in line with certain themes. Investors should note that the Xtrackers ETFs are not capital protected, the value of your investment may go down as well as up. Investor capital may be at risk up to a total loss.
The table below provides an overview of the risk-reward profile that can arise for investors.
Opportunities |
Risks |
|
|---|---|---|
Macro |
Current efforts are made by the society towards achieving Sustainable Development Goals, thereby creating new potential areas of economic growth | Thematic indices are less diversified than broad benchmark indices and therefore more exposed to concentration risks. The performance of SDG relevant companies may also be driven by the evolution of the perceived relevance of such SDG(s) by societies or Governments |
Micro |
SDG-relevant companies are well positioned to benefit from such new potential areas of economic growth and may provide investment opportunities | SDG relevant companies are stocks subject to specific regulatory, operational and local financial risks.This can materiallv affect vour equitv returns in phases where markets go down or even up |
The 17 Sustainable Development Goals (SDGs), also called Global Goals are:
According to DWS experts, it can be assumed that, while almost all SDGs require action from governments or quasi-governmental organisations, corporations can play a significant part in achieving at least half of all targets. This is not solely limited to products and services but also includes corporate behaviours with respect to governance, use of resources, or waste disposal. Many goals require efforts from governments and corporations alike. For some goals, even individual citizens can directly contribute, e.g. with respect to reducing food waste or ending discrimination.
What are SDGs? |
What is ESG? |
|---|---|
|
The SDGs are part of the 2030 Agenda for Sustainable Development (17 goals to be achieved as part of the transition to a more sustainable and equitable future). SDG relevant companies are usually few (less than 100 globally) for a defined SDG, when strict relevance criteria are applied |
ESG includes various criteria (Environmental, Social, Governance) to assess the sustainability performance of companies against these criteria. ESG criteria can be applied to broad as well as concentrated benchmarks. |
The products apply the following exclusions, based on the MSCI ESG Screened methodology and supplemented with product-specific exclusions based on SDG alignment data and country classifications:
Methodology for the multi-theme SDG index available here
Methodology example for a single-goal SDG index available here
1. With the 2030 Agenda, the United Nations (UN) has established a common plan for peace and prosperity. The document was adopted by all UN member states in 2015 and offers 17 for Sustainable Development Goals to fight the most important global issues. Please see Sustainable Development Goals | United Nations Development Programme (undp.org) for further details.
2. MSCI Sustainable Impact Solutions measure revenue exposure to Sustainable Impact Solutions which represents the total of all revenues derived from any of the following social and environmental impact themes including nutrition, sanitation, major diseases treatment, SME finance, education or affordable real estate, alternative energy, energy efficiency, green building, pollution prevention and sustainable water as determined by MSCI
3. Offering broad coverage of several key themes: Basic needs, empowerment, climate change, natural capital, governance. More information
5. MSCI ESG engine used to construct Circular Transition Universe; market cap weighted
Institutional Investors
BEFORE ENTERING THIS WEBSITE, PLEASE READ CAREFULLY THE FOLLOWING IMPORTANT TERMS AND CONDITIONS (THE "TERMS") THAT GOVERN YOUR ACCESS TO, AND USE OF, THIS WEBSITE, AND ACKNOWLEDGE YOUR AGREEMENT TO THEM. IF YOU AGREE TO THE TERMS, CLICK "ACCEPT" AT THE END OF THESE TERMS TO ENTER THIS WEBSITE. IF YOU CLICK "LEAVE PAGE" YOU WILL NOT BE ABLE TO ACCESS THIS WEBSITE. THESE TERMS ARE A BINDING AGREEMENT BETWEEN YOU AND DWS, AND GOVERN YOUR ACCESS AND USE OF THE WEBSITE.
FOR PROFESSIONAL INVESTORS ONLY
THE CONTENT HEREIN IS RESTRICTED TO PROFESSIONAL INVESTORS, SUCH AS BANKS, INVESTMENT ADVISERS, PENSION FUNDS, INVESTMENT FUNDS, INSURANCE COMPANIES AND SIMILAR INSTITUTIONS AND IS NOT INTENDED FOR RETAIL INVESTORS. BY AGREEING TO THESE TERMS THE USER CONFIRMS AND ACKNOWLEDGES THAT HE/SHE IS ACTING IN HIS/HER CAPACITY AS A PROFESSIONAL INVESTOR OR REPRESENTING A PROFESSIONAL INVESTOR AND IS NOT ACTING IN A RETAIL CAPACITY.
ANY ENTITY ENTERING THIS SITE WHO INTENDS TO ACT AS AN INTERMEDIARY AND MAKE FUNDS OR ETC SECURITIES (THE “PRODUCTS”) AVAILABLE TO THIRD PARTY CLIENTS; INTRODUCE PRODUCTS TO THIRD PARTY CLIENTS OR SUBMIT BUSINESS IN RELATION TO A PRODUCT ON BEHALF OF A THIRD PARTY CLIENT’S BEHALF, IN RETURN FOR RECEIPT OF A PAYMENT OR OTHERWISE, SHALL BY ACCEPTING THESE TERMS AND CONDITIONS AND/OR BY ENGAGING IN ANY OF THE AFOREMENTIONED ACTIVITIES IN RELATION TO ANY PRODUCT, BE DEEMED TO HAVE ACCEPTED THE TERMS OF BUSINESS “TERMS OF BUSINESS FOR INTERMEDIARIES” WHICH SHALL BE MADE AVAILABLE UNDER THE HEADING “RISKS AND TERMS” ON THE WEBSITE.
YOU (THE "USER") AGREE NOT TO UNDERTAKE ANY ACT OR OMISSION THAT WOULD CONSTITUTE A BREACH OF THESE TERMS AND REPRESENT AND WARRANT THAT YOU ARE LEGALLY PERMITTED TO ACCESS AND USE THE WEBSITE.
ANY REFERENCE TO “DWS” ON THIS WEBSITE OR IN THESE TERMS SHALL, UNLESS OTHERWISE REQUIRED BY THE CONTEXT, BE UNDERSTOOD AS A REFERENCE TO DWS GROUP GMBH & CO. KGAA AND/OR ITS AFFILIATES AND, AS THE CASE MAY BE, ANY INVESTMENT COMPANIES PROMOTED OR MANAGED BY ANY OF THOSE ENTITIES.
THIS WEBSITE IS PROVIDED BY DWS INTERNATIONAL GMBH EITHER (I) ON ITS OWN BEHALF IN ITS CAPACITY AS DISTRIBUTOR OF THE PRODUCTS REFERRED TO ON THIS WEBSITE, (II) ON BEHALF OF DWS INVESTMENT S.A., ACTING IN ITS CAPACITY AS MANAGEMENT COMPANY OF CERTAIN FUNDS REFERRED TO ON THIS WEBSITE, OR (III) ON BEHALF OF DB ETC PLC, XTRACKERS ETC PLC AND XTRACKERS (JERSEY) ETC PLC AS ISSUERS OF ETC SECURITIES. EACH OF THESE ENTITIES MAY BE RESPONSIBLE FOR THE WEBSITE'S CONTENT AND ANY OF THE FUNDS, ETC SECURITIES AND SERVICES (INCLUDING FINANCIAL INSTRUMENTS) DESCRIBED (TOGETHER "THE WEBSITE").
ACCESS TO PRODUCTS AND SERVICES DISPLAYED ON THIS WEBSITE AND LINKED SITES HEREAFTER MAY BE RESTRICTED TO CERTAIN PERSONS OR IN CERTAIN COUNTRIES. PRODUCTS SHOWN ON THESE SITES SHALL NOT BE OFFERED OR SOLD TO ANY PERSONS PROHIBITED BY THE LAW IN THEIR COUNTRY OF ORIGIN OR IN ANY OTHER RELEVANT COUNTRY. COUNTRY SPECIFIC SITES LISTED ON THE PREVIOUS WEBPAGE MAY ONLY BE ACCESSED BY READERS OF THESE TERMS WHO ARE PERMANENTLY RESIDENT IN THE RELEVANT COUNTRY AND LEGALLY PERMITTED TO LOG ON TO THE RELEVANT PAGES. IN PARTICULAR U.S. PERSONS AND PERSONS RESIDENT IN OTHER COUNTRIES NOT DISPLAYED IN THE LIST ON THE PREVIOUS WEBPAGE ARE FORBIDDEN FROM VIEWING FURTHER PAGES. BY SELECTING A COUNTRY FROM THE LIST ON THE PREVIOUS WEBPAGE YOU HEREBY AFFIRM THAT YOU ARE A RESIDENT OF THAT COUNTRY. DWS SPECIFICALLY ASSUMES NO RESPONSIBILITY WHATSOEVER FOR THE DISTRIBUTION OF CONTENT OF THE WEBSITE TO INDIVIDUALS OR ENTITIES WHICH PROVIDE FALSE INFORMATION REGARDING THEIR COUNTRY OF LEGAL RESIDENCE.
THESE MATERIALS AND ANY PRODUCTS DESCRIBED ON THIS WEBSITE ARE NOT BEING OFFERED OR TARGETED TO U.S. PERSONS.
Nothing contained on this Website should be considered as an offer to purchase any of the Products. Consequently, the information on this Website does not constitute, and may not be used for the purposes of, an offer to acquire or sell any fund shares or ETC securities to any person in any jurisdiction. Pricing levels and valuations published on this Website are indicative and they and other information displayed on this Website are for information purposes only.
Information made available on this Website should not be considered as legal, tax, investment or securities advice or any form of recommendation to purchase Products or services described on this website or any opinion regarding the appropriateness of any investment. You should seek professional advice on all of the foregoing before making any investment decision.
Offering Documents referring to a specific fund (including sub-funds) or ETC security are available on this Website. Users should carefully read the information contained in such documents (including the latest version of the Key Investor Information Document or Key Information Document) before making any investment decision.
Past performance information (either actual or simulated) contained on this Website is not a reliable indicator of future results.
Although best efforts have been used to ensure that the information set out on this Website is reliable, no warranty is made as to its accuracy, completeness and adequacy. Any opinions expressed reflect the current view of DWS, in its capacity as distributor, which may change without notice.
DWS reserves the right to partly or completely change the Website at any time and to restrict, interrupt or terminate its service.
DWS reserves the right to modify or amend these Terms at any time. DWS invites you to consult these terms and conditions from time to time to familiarise yourself with the changes.
Content and design of the Website are the property of DWS and are protected by copyright. Any copying, publication, reproduction, distribution, re-transmission, assigning or use of any portion of the Website or of its content requires the prior written consent of DWS.
DWS respects your privacy. Personal data collected when visiting this website are processed in accordance with applicable data protection law.
You agree that where you provide your name and contact details and request information on our products, we may send you such information, including by e-mail. You can ask us at any time to stop sending such information.
By entering this website, you acknowledge and agree that DWS may place cookies on the device via which you access the site. These cookies are either strictly necessary to provide you with the services you have requested or to give us anonymised data about your use of our websites. This includes details such as the website from which you accessed our website, the duration of your visit and the pages you viewed. Such information, which will not include your name, helps us improve the performance and content of our websites. It also records (for up to a maximum of one year) which country you are interested in, and whether as a retail or professional investor. You can block or delete cookies from your computer - simply refer to the help function of your browser.
Please also read the section “Privacy Policy” and “Cookie Information” under the heading "DWS Privacy Notice" on the Website for more information.
Communications over the Internet and by e-mail cannot be guaranteed to be secure. There is a risk that information contained within an e-mail communication and any attachment thereto, including potentially confidential information, may be intercepted, lost, destroyed or delayed in transmission. Although DWS will use reasonable efforts to minimise such risk, it does not warrant that any communication or e-mail or any attachments thereto, that is sent out, will be free from viruses, worms or other harmful components.
Telephone calls to DWS may be recorded for training and monitoring purposes and to comply with applicable law and regulations. Such telephone recordings are the property of DWS.
Certain hypertext links on the Website may lead the User to websites that are not under the control or charge of DWS. DWS is not responsible with respect to any material contained in or conducted through any such external websites.
These terms and any non-contractual obligations arising out of or in connection with them are exclusively governed by and shall be construed in accordance with the laws of Germany.
If at any time any provision (or part of any provision) of these Terms is, or becomes, illegal, invalid or unenforceable in any respect under the law of any jurisdiction, that shall not affect the legality, validity or enforceability in that or any other jurisdiction of any other provision (or any other part of this provision) of these Terms.
The Products described on this Website are not eligible for sale in all countries. The Offering Documents contain information as to the selling restrictions applicable to any particular Product and the User should read them carefully.
In particular, the following restrictions apply:
Residents of the United States of America:
The information set out on this Website is not directed to the United States. U.S. persons (as defined in Regulation S under the U.S. Securities Act 1933) and persons resident in the U.S. may not enter the Website. Information from this Website may not be distributed or redistributed into the United States or into any jurisdiction where it is not permitted. Any Products described on this Website have not been and will not be registered under the U.S. Securities Act of 1933 as amended and trading in the securities has not been approved for purposes of the U.S. Commodities Exchange Act of 1936. The Products may not be offered or sold in the United States, to U.S. persons or U.S. residents.
The Products described on this Website are only offered or sold to persons in any other jurisdiction, if applicable law permits this.
Based on the second shareholder rights directive (SRD II) asset managers have to disclose certain information. Below is the summary of where to find certain information:
Information on the key material medium to long-term risks associated with the investments are as follow:
The DWS investment decision process enables us to identify risks and return opportunities. Our extensive research resources and teams of experienced professionals continually analyse the relevant markets as well as the political and economic environment. Furthermore, our Strategic CIO View provides a long-term outlook and orientation. In addition, the independent risk function ensures that investment decisions are taken in a disciplined and controlled way.
