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.
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Efficient
‘one‑product solution’
Four options offering
tiered risk/return profiles
Gold exposure
expands the investment range
What are Diversified Portfolio ETFs?
Looking for return opportunities in capital markets while reducing risk? Diversified Portfolio ETFs combine these seemingly opposing objectives – in a single product. Their equity allocation opens up global growth opportunities across developed and emerging markets, while bonds from different segments can act as a robust anchor, potentially providing regular income. An allocation to gold complements the portfolios and aims to serve as a value‑preserving diversifier. The result is a cost‑efficient ‘one‑product solution’ with a broadly diversified investment concept that can support medium‑ to long‑term wealth accumulation.
Why invest in Diversified Portfolio ETFs?
With its multi‑asset approach, the four global Xtrackers Diversified Portfolio ETFs go beyond the traditional equity and fixed‑income building blocks. They combine a broad range of ETFs and ETCs across equities, bonds and commodities, deliberately aiming for a broad diversification as stressed by the term “Diversified” in the product name.
This is how the Diversified Portfolio ETFs construct multi-asset portfolios:
Diversified Portfolio ETFs go beyond major equity indices such as the MSCI World and MSCI Emerging Markets, which cover large and mid‑cap companies in developed and emerging markets. Instead, they also include smaller companies – so‑called small caps – with the aim of achieving the broadest possible market coverage. The equity component offers long‑term growth opportunities but also involves higher risks than other asset classes, as equities tend to be more sensitive to market fluctuations (volatility) and economic downturns.
Exposure within the bond universe is not limited to traditional government bonds from developed markets or high quality (investment grade) corporate bonds. High yield and emerging market bonds are included as well. High yield bonds are often regarded as an attractive source of income, as they pay higher interest (coupons) than investment grade bonds which offer higher credit quality but lower yields. The higher yields of high yield bonds reflect the lower credit quality of the issuers and can be seen as a risk premium. Within a portfolio, they can support diversification, albeit with higher default risks and greater potential for price losses during economic downturns. The objective is to achieve broad diversification across different bond types and credit qualities. It should be noted that bonds may generally be associated with interest rate, credit and market risks. Hedged share classes may be used to minimize foreign exchange effects.
Last but not least, gold is added from the commodities segment. For this purpose, the portfolio ETFs invest in a gold ETC. ETC stands for Exchange Traded Commodities and refers to exchange traded products that track the performance of commodities such as gold. Physically backed precious metal ETCs store corresponding gold bars in vaults, thereby reducing issuer risk.
While gold can enhance diversification and potentially reduce overall portfolio risk, commodity investments may be subject to significant price fluctuations, for example in response to geopolitical events.
The investment universe covered by the Xtrackers Diversified Portfolio ETFs
The investment universe of the global Diversified Portfolio ETFs is made up of several portfolio components, each assigned to one of the core asset classes: equities, bonds and commodities (gold). The composition shown is based on the strategic allocation at the time of launch in January 2026 and forms the basis for broad diversification across different regions, sectors and sources of risk. Security rebalancing takes place on a quarterly basis.
Illustrative example of the composition of the Diversified Portfolio ETFs
Source: DWS International GmbH, portfolio components at launch, January 2026; updates are published for the respective product. Hedged: A strategy to reduce currency risk when investing in foreign currencies. In currency‑hedged ETFs, derivatives—typically forwards—are used to minimise the impact of currency fluctuations on returns. While this hedging can reduce losses resulting from adverse exchange‑rate movements, it also eliminates potential gains from favourable currency developments.
Diversification by design: equities, bonds and gold in concert
The equity and bond allocation: balancing returns and risk
A key driver of a portfolio’s long‑term development is the interaction between equity and bond allocations, as their weighting has a decisive influence on its risk‑return profile. The Xtrackers Diversified Portfolio ETFs are available with four target equity allocations of 20%, 40%, 60% and 80%, thereby covering a broad range of risk‑return preferences. All portfolios follow predefined target weights and are rebalanced to these levels on a rules‑based, quarterly basis. For example, if the invested equity ETFs record proportionally higher price gains, these positions are partly sold. This allows the ETF to realise profits and use the capital released to increase allocations to asset classes that are below their target weights. The objective is to consistently maintain the originally defined portfolio structure, thereby ensuring transparency, discipline and predictability.
Why gold can complete the picture
The primary role of gold in a portfolio is to enhance diversification. Historically, gold has at times behaved differently from equities or bonds and, over the long run, can help reduce overall portfolio volatility. It is traditionally regarded as a store of value, particularly when inflation is rising and currencies are losing purchasing power. Even though the gold price has increased in recent years, the precious metal serves primarily as a diversifying building block within a portfolio, as it does not generate ongoing income in the form of interest or dividends. Accordingly, only a limited allocation is typically recommended – usually in the low single‑digit percentage range. In the Xtrackers Diversified Portfolio ETFs, gold is therefore included with a target allocation of 5%.
Four allocations for different investor preferences
The four risk‑return types illustrate how increasing equity allocations influence risk and return potential. They are used to categorise investment strategies in a standardised way — ranging from risk-averse to growth‑focused.
Risk-averse - 20% equity allocation
With its high bond allocation, the strategy aims to preserve capital while limiting return potential. This approach, featuring a low allocation to equities, may be particularly suitable for risk-averse investors who wish to avoid fluctuations in value as much as possible – for example, due to a shorter investment horizon or as a defensive building block within a portfolio.
Balanced - 40% equity allocation
This variant offers a balance between stability and growth. With its increased equity allocation, it may be suitable for investors who are looking for a balanced portfolio and are willing to accept moderate fluctuations in value in order to achieve somewhat higher long term returns compared with more defensive investments.
Return-seeking - 60% equity allocation
With this allocation, the return potential of equity markets comes into focus. The higher equity allocation is aimed at return-seeking investors with a medium‑ to long‑term investment horizon who are generally willing to accept temporary fluctuations in value to participate more strongly in potential equity returns. A combination of approximately 60% equities and 40% bonds has been regarded as a balanced middle ground for decades: A bias towards equities for growth opportunities, alongside a sufficient bond exposure to help cushion volatility.
Growth-focused - 80 % equity allocation
The focus is on long‑term capital growth driven by potential equity returns, accompanied by higher volatility. The high equity allocation may be suitable for growth‑focused and risk‑tolerant investors with a long investment horizon who are able to withstand pronounced market movements.
| Risk-averse | Balanced | Return-seeking | Growth-focused | |
|---|---|---|---|---|
| Equities Weight | 20% | 40% | 60% | 80% |
| Fixed Income Weight | 75% | 55% | 35% | 15% |
| Gold Weight | 5% | 5% | 5% | 5% |
| Typical Investment Horizon | ca. 3 Years | ca. 5 Years | ca. 7 Years | ca. 10 Years |
Allocation based on Modern Portfolio Theory (Markowitz) and established educational models (CFA curriculum).
Xtrackers Diversified Portfolio ETFs at a glance
Xtrackers Diversified Portfolio ETFs combine multiple asset classes in a single product, enabling broad diversification with just one purchase. Instead of investing directly in individual equities or bonds, they bundle several ETFs and ETCs into an overarching structure. Asset allocation – the strategic balance between equities and bonds – follows a fixed, rules‑based approach with predefined target weights.
| ETF Name | ISIN | Distribution Policy | TER p.a. |
|---|---|---|---|
| Diversified Portfolio 20% Equity UCITS ETF 1C | LU3116008346 | capitalising | 0.24% |
| Diversified Portfolio 40% Equity UCITS ETF 1C | LU3116008429 | capitalising | 0.24% |
| Diversified Portfolio 60% Equity UCITS ETF 1C | LU3116008692 | capitalising | 0.24% |
| Diversified Portfolio 80% Equity UCITS ETF 1C | LU3116008775 | capitalising | 0.24% |
What risks do Diversified Portfolio ETFs involve?
Like other investments, Diversified Portfolio ETFs are subject to various risks, including general market risks related to the respective underlying portfolio. The value of an investment may rise or fall. Despite being diversified, these ETFs do not protect your original investment and may fall in value. In addition, they are exposed to currency risk. Foreign exchange markets can be highly volatile. Significant price fluctuations may occur in currency markets within very short periods of time and may result in losses for the investment.
- The value of the equity allocation depends on a number of factors, including market conditions, the current economic environment, industry developments, geographic region, and political events. The ETFs invest, among other things, in companies with small (small caps) and mid‑capitalisation (mid caps). Compared with investments in companies with larger market capitalisation, this may involve higher risks, such as lower liquidity or greater price volatility. The ETFs also invest in less economically developed countries (emerging markets), which are associated with higher risks than developed economies. Political unrest and economic downturns may occur with greater probability.
- The value of the bond allocation depends on a number of factors, including credit risk and interest rate risk. In addition, investments are made in non‑investment‑grade bonds. These typically have a higher risk of default and are more volatile.
- The value of the commodities allocation is largely driven by movements in the price of gold. Precious metal prices respond, among other things, to economic factors and generally exhibit higher volatility than prices of other asset classes.