DWS launches euro and US dollar Xtrackers corporate green bond ETFs
- Xtrackers breaks new ground with UCITS ETFs referencing indices specifically designed to target green corporate bonds
- Exposure to investment grade green bonds via indices structured to meet the EU’s Article 9 Sustainable Finance Disclosure Regulation requirements
- Quintet Private Bank serves as seed investor and will use the ETFs in their discretionary portfolios
DWS has entered the green bond exchange traded fund (ETF) market with the launch of two Xtrackers ETFs that provide investors with access to the rapidly growing market for green corporate bonds. Until now, the UCITS green bond ETF space has been dominated by products targeting the broad green bond segment, resulting in substantial allocations to sovereign and supra-national debt, but in a breakthrough development the new Xtrackers ETFs specifically target the green corporate bond market.
The Xtrackers EUR Corporate Green Bond UCITS ETF and Xtrackers USD Corporate Green Bond UCITS ETF listed today on Deutsche Bӧrse. The ETFs use physical replication and track newly developed Bloomberg Barclays indices that use MSCI ESG Research data to assess the credentials of eligible debt based on Green Bond Principles criteria (see the “Notes to Editors” section).
To qualify for the index, bonds must be rated investment grade and proceeds have to be designated to the financing of climate and environmental projects. Eligible issuers must satisfy ESG (environmental, social and governance) criteria related to MSCI ESG ratings, business involvement and controversies filters. The indices align with DWS ESG standards and have been designed to meet the Article 9 classification under the European Union's Sustainable Finance Disclosure Regulation*, which means they qualify as funds that specifically have sustainability as their investment objective.
“Green bond issuance is booming, but most green bond indices are biased towards sovereign and supranational debt. The new Xtrackers US dollar and EUR green bond ETFs have been constructed to provide investors with exposure to the corporate and corporate-related agency bond segment of this rapidly developing market. This provides corporate bond investors with a compelling alternative to traditional and ESG offerings,” said Michael Mohr, DWS Head of Passive Product Development.
Quintet, the Luxembourg headquartered private bank, is seed investor in the ETFs and will deploy the products in their discretionary portfolios. The bank worked closely with DWS during the product development phase to ensure the ETFs reflect investor preferences.
“We are committed to making sustainability the default approach for all our clients,” said James Purcell, Group Head of Sustainable Investment at Quintet. “That includes working with a globally leading group like DWS to provide innovative products that meet client needs and help address the urgent climate challenge.”
Both ETFs have an annual all-in fee (total expense ratio) of 0.25%. A EUR-hedged share class of Xtrackers USD Corporate Green Bond UCITS ETF has also listed.
*For more information, see: eur-lex.europa.eu
Notes to Editors
The Green Bond Principles were established in 2014 by a group of financial institutions that came together to agree a set of standards designed to underpin the green bond market by allowing investors to assess the green credentials of labelled issuance. MSCI follows the Principles, which are based on four eligibility checks: 1) Use of Proceeds; 2) Process for green project evaluation and selection (the criteria and process for determining eligible projects); 3) Management of proceeds; 4) Ongoing reporting.
More information can be found at:
Information on Bloomberg Barclays MSCI USD Corporate and Agency Green Bond Index
Information on Bloomberg Barclays MSCI EUR Corporate and Agency Green Bond Index
| ETF name | Xtrackers EUR Corporate Green Bond UCITS ETF | Xtrackers USD Corporate Green Bond UCITS ETF | Xtrackers USD Corporate Green Bond UCITS ETF |
|---|---|---|---|
| Index | Bloomberg Barclays MSCI EUR Corporate and Agency Green Bond Index | Bloomberg Barclays MSCI USD Corporate and Agency Green Bond Index | Bloomberg Barclays MSCI USD Corporate and Agency Green Bond Index |
| Share Class | 1C: EUR | Accumulating | 2C: USD | Accumulating | 1C: EUR-hedged | Accumulating |
| Bloomberg Ticker | XGBE | XGBU | XGUE |
| ISIN | IE000MCVFK47 | IE0003W9O921 | IE00028H9QJ8 |
| All-in Fee | 0.25% | 0.25% | 0.25% |
| Physical/Synthetic | Physical | Physical | Physical |
| Currency | EUR | USD | EUR |
About DWS Group
DWS Group (DWS) is one of the world's leading asset managers with EUR 820bn of assets under management (as of 31 March 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.
© DWS Investments UK Limited 2021.