Xtrackers ESG ETF Suite exceeds USD2.7bn

DWS' Xtrackers S&P 500 ESG ETF has surpassed USD230 million in AUM, raising the overall AUM of the Xtrackers ESG ETF product suite to USD2.7 billion. 

With its increased scale and growth, DWS is reducing the fund’s net expense ratio from 0.11 percent to 0.10 percent effective 28 July, 2020. Launched one year ago, the fund is the first ETF to provide exposure to an Environmental, Social and Governance (ESG) adjusted S&P 500 in the US market.

“The continued success of SNPE, and our overall Xtrackers ESG ETF suite, highlights our capabilities to deliver ESG solutions across core benchmarks for investors,” says Luke Oliver, Head of Systematic Investment Solutions, Americas. “Sustainability is one of DWS’s core foundational values and as we continue to see investors allocate more to ESG ETF solutions, Xtrackers is well-positioned to meet investor needs with our award-winning and innovative lineup of ESG products.”

New research from DWS underscores the long-term value proposition for investors seeking to align their investments with their values, while maintaining a risk and return profile in line with the S&P 500. Results show that the S&P 500 ESG ETF (SNPE) offered sizeable alpha(a) when compared to the “traditional” S&P 500 during both the height of the pandemic market volatility, and the stock market recovery. The S&P 500 ESG ETF outperformed the S&P 500 by 51 basis(a) points in Q2 2020, and 294 basis points in the trailing one year period. The S&P 500 ESG Index also produced annualised returns higher than the S&P 500 over three, five and 10-year time frames, suggesting that investing with ESG principles in mind has not historically required a sacrifice in terms of performance. 

As one of the largest ESG ETF product providers in the US, DWS currently manages more than USD2.7 billion across eight ESG ETF products. These include SNPE and Xtrackers MSCI USA ESG Leaders Equity ETF (USSG), one of the largest ESG ETFs by assets.

In May, DWS expanded its ESG ETF offerings to include three new fixed income ETFs, including Xtrackers JP Morgan ESG Emerging Markets Sovereign ETF (ESEB), a first of its kind in the US market.

“Our commitment to innovation drives DWS to bring new products to market that give investors access to ESG assets well-positioned for long term-growth,” says Oliver. “With so many passive products flooding the market, investors are looking for products that track the index successfully, and also have active stewardship practices that focus on company engagement to foster positive environmental and social outcomes.”

According to Morningstar’s “Proxy Voting by 50 US Fund Families,” report, DWS led all fund groups evaluated by the firm over a five-year period in supporting ESG-related shareholder proposals. The proxy voting process is indicative of a firm’s commitment to effecting governance changes and its stewardship on sustainability issues such as climate change, environmental practices, diversity, gender-pay equity, gun-related investments and human rights, among other ESG-related factors.

With a 25-year history in the responsible investing space, DWS has long recognised the importance of ESG factors for investors. Most recently, the Xtrackers suite was honoured by Fund Intelligence as its 2020 ETF Suite of the Year. In addition, Xtrackers MSCI USA ESG Leaders Equity ETF was recognised as Best Newcomer/ESG Impact ETF of the year.