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.

Study by DWS and CREATE-Research shows pension funds growing interest in impact investing

  • Twenty-two percent of pension funds surveyed have already implemented, or are implementing, impact investing as part of their passive investments
  • More than half of survey participants believe that the growing interest in thematic funds will transform into impact investing over time
  • Around 28% of pension funds expect to integrate impact investing-focused indices into their portfolios in the next three years 

Impact investing is set to penetrate capital markets, and passive investments such as exchange-traded funds (ETFs) and mandates will be an important driver of this development. This is the central finding of the latest study by DWS and CREATE-Research: Impact Investing 2.0 - Advancing into public markets. Impact investing is generally understood to mean forms of investment that have a social and/or environmental goal in addition to a financial return.

The study shows that the advance of impact investing is driven by two key data points: to reach the global net zero target by 2050, investments of USD 100 trillion are likely to be required; and to implement the United Nations' 17 Sustainable Development Goals (SDGs) by 2030, annual spending of USD 5 trillion to USD 7 trillion is needed. Private markets cannot raise this capital on their own due to their limited scalability. However, publicly traded instruments such as funds and ETFs offer both the scale and reach to mobilise the needed capital.

The extent to which this development has progressed is shown in the report, which is based on a survey of 50 of the largest pension funds in North America, Europe, Asia and Australia, which together manage assets of €3.3 trillion (As of July 2022). The report finds that 22% of pension funds have already implemented, or are currently implementing, impact investing as part of their passive investments.

"Pension funds increasingly see it as their duty to contribute, on behalf of their pensioners, to mitigate the negative effects of past economic development on the environment, climate and biodiversity. There is still a long way to go, but the important first step has been taken," said Amin Rajan, Chief Executive of CREATE-Research.

As net zero and the UN’s SDGs can be replicated with rules-based indices such as EU Paris-aligned and EU climate transition benchmarks, SDG index products, or even green bond indices, as well as thematic passive exposures using ETFs and mandates, can help impact investing make a breakthrough in the public markets.

The report backs this up, with 58% of survey participants believing the growing interest in thematic funds will evolve into impact investing over time. Sixty-four percent believe that the net zero target will favour impact investing, while 54% expect SDGs to provide new opportunities. Twenty-eight percent of pension funds expect to use SDG and EU Paris-aligned and EU climate transition indices over the next three years.

"CREATE-Research's important study shows that ETFs and passive mandates can make all the difference in helping impact investing break through on a broad scale. We are already seeing high demand from private and institutional investors for index concepts that formulate concrete goals, and we will be further expanding our efforts in this area," said Simon Klein, Global Head of Passive Sales at DWS.

The full report, Passive Investing 2022: Impact Investing 2.0 - Advancing into public markets can be downloaded here: Study

 

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.

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