Xtrackers by DWS Launches US National Critical Technologies ETF
NEW YORK, NY – November 16, 2023 – DWS, one of the world’s leading asset managers announced today the listing of a new exchange-traded fund (ETF), the Xtrackers US National Critical Technologies ETF (NYSE: CRTC) (the “Fund”), which is designed to provide investors with equity exposure to large and mid-cap companies from developed market countries that satisfy key criteria related to critical technology sectors and geopolitical risk ratings. Companies are carefully screened for their association with one of 14 critical technology areas established by the Office of the Undersecretary of Defense Research & Engineering (a division of the Department of Defense) that have been deemed vital to maintaining the national security of the United States today and in the future. These critical technologies range from emerging opportunity fields such as biotechnology and quantum science to wider areas such as microelectronics and renewable energy.
“In our ongoing build-out of the Xtrackers ETF offering in the US market, we continue to focus on key strategic themes in the current economic environment as well as the foreseeable future. Complementing our existing offerings in Cybersecurity (ticker symbol: PSWD), Semiconductors (ticker symbol: CHPS) and US Green Infrastructure (ticker symbol: UPGR), our newest launch, CRTC, is an innovative way for investors to gain efficient exposure to technologies deemed critical to the national security of the United States”, said Dirk Goergen, CEO of DWS Americas.
“Over the past few decades, advancements in technology and infrastructure have become a key resource and determining factor for current and future economic competitiveness,” added Arne Noack, Head of Systematic Investment Strategies, Americas. “Our new Xtrackers US National Critical Technologies ETF leverages a geostrategic risk rating that evaluates risks on different levels. This will provide investors with exposure to sectors and companies aligned to technologies of strategic importance, as well as fortify their investments against certain geostrategic interdependencies.”
Description of Underlying Index and ETF Expense Ratio
The Fund seeks investment results that correspond generally to the performance, before fees and expenses, of the Solactive Whitney U.S. Critical Technologies Index (the “Underlying Index”). The Underlying Index is designed to track companies that support critical emerging technologies across the U.S. and its allies by selecting companies from a defined investment universe that satisfy key criteria related to their association with critical technology sectors and their geopolitical risk rating. The Underlying Index’s investment universe is derived from the large and mid-cap companies in developed market countries that comprise the Solactive GBS Developed Markets Large & Mid Cap USD Index (the “Parent Index”). Companies are eligible for inclusion in the Underlying Index if (i) they are associated with one of 14 critical technology sectors and (ii) they receive a sufficiently high geostrategic risk rating score, each as determined pursuant to index selection criteria developed by J.H. Whitney Data Services LLC (“J.H. Whitney”).
J.H. Whitney follows a two-step process to select individual securities for the Underlying Index. First, J.H. Whitney uses a critical technology screen to select companies that are associated with one of 14 critical technology areas established by the Office of the Undersecretary of Defense, Research & Engineering that have been deemed to be vital to maintaining the national security of the United States. Second, J.H. Whitney assigns each company that passes the critical technology screen a geostrategic risk rating score using a proprietary model that quantifies the relative level of risk that the individual company may face as a result of geopolitical activities, including, economic sanctions, national industrial policy actions, national regulatory actions and other economic strategic competition actions taken by the U.S. and adversarial nations.
As of October 31, 2023, there were 1,648 constituent companies in the Parent Index of which 242 companies were selected for the Underlying Index by J.H. Whitney after its application of its critical technology screens and geostrategic risk rating process. As of such date, tech stocks, Alphabet and Microsoft, oil companies, Exxon Mobil and Chevron, and drug makers, Merck & Co and Abbvie, were the biggest Underlying Index components.
The ETF is competitively priced with net/gross expense ratios of 0.35%.
The addition of the Fund expands the Xtrackers US product suite to 44 funds. Since January 2023, Xtrackers by DWS has launched 6 ETFs, including CRTC, and has plans to continue to approach the market with innovative, cost disruptive indexing strategies that give investors building blocks to various types of exposures. The Fund is the fourth product in the Xtrackers US thematic suite. To learn more about Xtrackers ETFs available in the US, please visit www.etf.dws.com/en-us/etf-products/.