DWS launches Xtrackers Net Zero ETF in the US
DWS has announced the launch of a new Xtrackers ETF designed to provide large and mid-cap US equity exposure aligned with an internationally recognised framework and to capture the move of the global economy to a net zero emissions environment.
Xtrackers Net Zero Pathway Paris Aligned U.S. Equity ETF (NYSE Ticker: USNZ) listed on the New York Stock Exchange provides exposure to a unique Paris Aligned Benchmark (PAB) index that uses a transparent set of rules that aim to be at the cutting edge of sustainable investment practices. The index is designed to provide a 50 per cent reduction in carbon intensity versus a market capitalisation weighted U.S. equity index, and a carbon intensity reduction trajectory of 7 per cent year-on-year. It provides an evidence-based, statistically driven ‘pathway’ to net zero, aligned with the Paris Climate Accords and their two main objectives: to achieve a net zero emissions economy by 2050 and limit the rise in global temperature by 1.5°C above pre-industrial levels.
“There is a clear need for investments that align with net zero aims. USNZ provides a powerful net zero investment strategy that meets the latest regulatory standards” that govern Paris aligned benchmark indices as defined above,” says Arne Noack, Head of Systematic Investment Solutions, Americas, at DWS. “DWS has a long history of providing ETF investors with specialist investment opportunities that combine the efficiency of passive investing with the advantages of well thought out, rules-based strategies for particular needs. This new listing is another example of that.”
In addition to meeting PAB regulations, the index also aims to comply with recommendations published by the Institutional Investors Group on Climate Change (IIGCC)*, specifically its Net Zero Investment Framework.
DWS engaged with index provider Solactive to develop the index, which is called the Solactive ISS ESG United States Net Zero Pathway Enhanced Index. It consists of 386 U.S. large and mid-cap stocks and is re-balanced semi-annually.
Amanda Rebello, Head of Passive Sales at DWS, U.S. Onshore, commented: “Our clients are keen to play a positive role in helping society reach net zero, and we are confident that this new ETF, with its rigorous index methodology run by Solactive, can help seek to meet that need.”
Xtrackers Net Zero Pathway Paris Aligned U.S. Equity ETF has a gross/net expense ratio of 0.10 per cent per annum, though subject to change.