DWS expands Xtrackers range with ESG screened ETF on China’s domestic equity market
- Xtrackers MSCI China A ESG Screened Swap UCITS ETF 1C ESG Screened racks performance of China's domestic equity market
- Based on an index that excludes companies that do not fulfil certain ESG characteristics
- DWS manages around €4.5 billion in Xtrackers ETFs tracking the Chinese equity market
DWS has launched an Xtrackers ETF that provides access to large and mid-cap stocks listed on the Shanghai and Shenzhen stock exchanges, the ‘A-shares’ segment of the market that accounts for the majority of Chinese equity market capitalisation.
The Xtrackers MSCI China A ESG Screened Swap UCITS ETF has been listed on the Deutsche Börse and the London Stock Exchange. Listings on other European exchanges are planned.
The ETF tracks the MSCI China A Inclusion Select ESG Screened Index. This is an ESG screened version of the MSCI China A Inclusion Index, which provides exposure to the A-shares segment of the MSCI China Index. The largest sectors in the MSCI China A Inclusion Select ESG Screened Index are financials (19.1% index weight), consumer discretionary (15.5%) and industrials (14.4%). The share of the largest ten positions in the index, which currently comprises 363 stocks, is 19 per cent (Source: MSCI, May 31, 2022).
The ESG Screened methodology leads to the exclusion of around a quarter of the index members of the MSCI China A Inclusion Index. For example, the stocks of companies that are associated with controversial or nuclear weapons, or that generate more than five percent of their revenues from conventional weapons, tobacco or the extraction of hard coal and oil sands are filtered out. Furthermore, stocks that have received an MSCI ESG rating of 'CCC' or that do not comply with the principles of the United Nations Global Compact are removed from the index. The ETF meets the requirement to be classified as a product under Article 8 of the EU Disclosure Regulation.
With the addition of Xtrackers MSCI China A ESG Screened Swap UCITS ETF, DWS now has eight ETFs covering segments of China’s equity market, representing assets under management of around EUR 4.5 billion (Source: DWS as of June 24, 2022). By comparison, assets under management in Xtrackers ETFs on Chinese equity indices amounted to EUR 2.2 billion at the end of 2019.
"China’s A-shares market is still significantly under-represented in many portfolios relative to its importance and growth prospects. The MSCI China A ESG Screened Swap UCITS ETF provides efficient and liquid access to the domestic A-shares market while taking into account fundamental sustainability characteristics," says Simon Klein, Global Head of Passive Sales, DWS.
Product Table
| ETF name | ISIN | China Equity segment | Annual All-in Fee (%) | AuM in EUR (Millions)[1] |
|---|---|---|---|---|
| Xtrackers MSCI China A ESG Screened Swap UCITS ETF 1C ESG Screened | LU2469465822 | A-shares | 0.29% | 5.13 |
| Xtrackers CSI300 Swap UCITS ETF 1C | LU0779800910 | A-shares | 0.50% | 2,050.91 |
| Xtrackers Harvest CSI300 UCITS ETF 1D | LU0875160326 | A-shares | 0.65% | 534.07 |
| Xtrackers Harvest FTSE China A-H 50 UCITS ETF 1D | LU1310477036 | A-shares, H-shares | 0.65% | 12.35 |
| Xtrackers FTSE China 50 UCITS ETF 1C | LU0292109856 | H-shares | 0.60% | 121.4 |
| Xtrackers Harvest MSCI China Tech 100 UCITS ETF 1C ESG Screened | LU2376679564 | A-shares, H-shares, international | 0.44% | 17.77 |
| Xtrackers MSCI China UCITS ETF 1C | LU0514695690 | A-shares, H-shares, international | 0.65% | 1,879.63 |
| Xtrackers MSCI China UCITS ETF 1D | LU2456436083 | A-shares, H-shares, international | 0.30% | 7.38 |
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.