DWS adds two new Xtrackers ETFs with exposure to the US equity market, which replicate the S&P 500 index while taking into account environmental, social and governance (ESG) criteria. DWS thus expands its successful range of Xtrackers S&P 500 ETFs with more than EUR 11 billion in assets under management (as of November 30, 2022). The Xtrackers S&P 500 Equal Weight UCITS ETF was the first in Europe to replicate this index following its launch in 2014.
The Xtrackers S&P 500 ESG UCITS ETF and the Xtrackers S&P 500 Equal Weight ESG UCITS ETF are listed on the Deutsche Boerse and the London Stock Exchange, and will soon be listed on other exchanges. The S&P 500 index, which covers the 500 largest companies by market capitalization, is one of the world’s most important benchmark indices. The S&P 500 Equal Weight index includes the same companies, but weights the 500 index members equally, at 0.2% each.
The new Xtrackers ETFs replicate indices that take into account additional selection criteria. The S&P 500 ESG Index and the S&P 500 Equal Weight ESG Index initially perform a series of exclusions before selecting constituents with ESG criteria in mind. For example, companies that exceed revenue thresholds in activities related to thermal coal, tobacco, and controversial weapons, among others, are excluded. In addition, all those that violate international norms and standards, such as the UN Global Compact Principles, are excluded.
Finally, companies with no ESG score by the S&P DJI are excluded, as well as those that rank in the bottom 25% of ESG scores for each global GICS industry group. In the second step, the index members are listed according to their S&P DJI ESG score. For this score, S&P Global ESG Research collects and evaluates company data against ESG criteria. Both the S&P 500 ESG and S&P 500 Equal Weight ESG target a fixed percentage of float-adjusted market capitalization (FMC) of the S&P 500 using S&P DJI ESG scores. The S&P 500 ESG index targets 75% of the FMC of the S&P 500 and selects companies from each GICS industry group in the S&P 500 index with the best ESG score, while the S&P 500 Equal Weight ESG index targets 60% of the FMC using the same process.
As a result, the S&P 500 ESG and S&P 500 Equal Weight ESG indices comprise about 300 securities instead of the original 500 securities. The index methodologies are designed to ensure that the ESG indexes achieve similar sector or industry risk characteristics as the original index.
“The importance of ETFs that track the U.S. equity market along with transparent environmental, social and governance criteria in a portfolio has grown significantly in recent years. We are very pleased to continue to expand our Xtrackers offering with attractive solutions for investors”.Simon Klein, Global Head of Passive Sales at DWS.
|Xtrackers S&P 500 ESG UCITS ETF|
Xtrackers S&P 500 Equal Weight UCITS ETF
|Ter p. a.||0,08%||0,17%|
|Underlying Index||S&P 500 ESG Index||S&P 500 Equal Weight ESG Index|