DWS has launched an emerging markets exchange traded fund that tracks an environmental, social and governance (ESG)-aware version of MSCI’s emerging markets equity index.
The Xtrackers ESG MSCI Emerging Markets Ucits ETF is now listed on the London Stock Exchange and tracks an index of companies meeting MSCI’s ESG criteria and low-carbon requirements.
The underlying index is part of MSCI’s ESG Leaders Low Carbon ex-Tobacco Involvement 5% index series.
In a media statement, Manooj Mistry, head of index investing at DWS, said the latest addition to the company’s ESG range is a significant one.
“The expansion of our ESG Xtrackers range to cover emerging market equities will provide investors with an efficient new tool for taking exposure to this important area of the market,” he explained.
Screening and rating methodology
The ETF has an annual ‘all in’ fee of 0.25%. The underlying methodology will screen based on ESG requirements and carbon emissions.
Companies with exposure to nuclear power, controversial weapons or tobacco production are excluded, as are companies with excessive revenues coming from areas such as alcohol, gambling or conventional weapons.
Remaining companies deemed to be in the universe are then scored and allocated an ESG rating relative to those around them.
Any below a threshold level will also be excluded.
The fund joins four other ESG ETFs currently offered, providing exposure to ESG-filtered equity indices tracking global, US, Japanese and European markets.
It also runs alongside the Xtrackers II ESG Euro Corporate Bond Ucits ETF, which offers exposure to the euro-denominated corporate bond market.