Xtrackers award-winning ESG ETF Suite exceeds $2.7B, with investors increasing allocations to ESG funds; lowers expense ratio for Xtrackers S&P 500 ESG ETF with increased scale, growth
DWS, one of the world's leading asset managers, announced today that its Xtrackers S&P 500 ESG ETF (NYSE Arca: SNPE) has surpassed $230 million in AUM, raising the overall AUM of the Xtrackers ESG ETF product suite to $2.7 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 July 28, 2020.1 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 U.S. market. 2
"The continued success of SNPE, and our overall Xtrackers ESG ETF suite, highlights our capabilities to deliver ESG solutions across core benchmarks for investors," said 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 sizable alpha(a) when compared to the "traditional" S&P 500 during both the height of the pandemic market volatility, and the stock market recovery.3 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.4 The S&P 500 ESG Index also produced annualized 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. 5
As one of the largest ESG ETF product providers in the U.S, DWS currently manages more than $2.7 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 J.P. Morgan ESG Emerging Markets Sovereign ETF (ESEB), a first of its kind in the U.S. 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," said 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 U.S. Fund Families," report, DWS led all fund groups evaluated by the firm over a five-year period in supporting ESG-related shareholder proposals.6 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 recognized the importance of ESG factors for investors. Most recently, the Xtrackers suite was honored by Fund Intelligence as its 2020 ETF Suite of the Year. In addition, Xtrackers MSCI USA ESG Leaders Equity ETF was recognized as Best Newcomer/ESG Impact ETF of the year.
For more information about DWS’s ETFs available in the U.S. or its commitment to ESG principles, visit: www.Xtrackers.com.
About DWS Group
DWS Group (DWS) is one of the world's leading asset managers with USD $772bn of assets under management (as of 31 March 2020). Building on more than 60 years of experience and a reputation for excellence in Germany and across Europe, DWS has come to be recognized by clients globally as a trusted source for integrated investment solutions, stability and innovation across a full spectrum of investment disciplines.
We offer individuals and institutions access to our strong investment capabilities across all major asset classes and solutions aligned to growth trends. Our diverse expertise in Active, Passive and Alternatives asset management – as well as our deep environmental, social and governance focus – complement each other when creating targeted solutions for our clients. Our expertise and on-the-ground-knowledge of our economists, research analysts and investment professionals are brought together in one consistent global CIO View, which guides our investment approach strategically.
DWS wants to innovate and shape the future of investing: with approximately 3,500 employees in offices all over the world, we are local while being one global team. We are investors – entrusted to build the best foundation for our clients’ future.
ETF shares are not individually redeemable, and owners of shares may acquire those shares from the Fund, or tender such shares for the redemption to the Fund, in Creation Units only.
Consider each fund’s investment objectives, risk factors, and charges and expenses before investing. This and other important information can be found in the fund’s prospectus, which may be obtained by calling 1-855-DBX-ETFS (1-855-329-3837) or by viewing or downloading a prospectus at www.Xtrackers.com. Please read it carefully before investing.
Xtrackers ETFs are managed by DBX Advisors LLC (the Advisor), and distributed by ALPS Distributors, Inc. (ALPS). The Advisor is a wholly owned subsidiary of DWS Group GmbH & Co. KGaA, and is not affiliated with ALPS.
SNPE Risks: Investing involves risk, including the possible loss of principal. Investing in securities that meet ESG criteria may result in the fund forgoing otherwise attractive opportunities, which may result in underperformance when compared to funds that do not consider ESG factors. Stocks may decline in value. Stocks of medium sized companies involve greater risk than securities of larger, more-established companies. Funds investing in a single industry, country or in a limited geographic region generally are more volatile than more diversified funds. Various factors, including costs, cash flows and security selection, may cause the fund’s performance to differ from that of the index. Performance of the fund may diverge from that of the Underlying Index due to operating expenses, transaction costs, cash flows, use of sampling strategies or operational inefficiencies. This fund is non-diversified and can take larger positions in fewer issues, increasing its potential risk. An investment in this fund should be considered only as a supplement to a complete investment program for those investors willing to accept the risks associated with the fund. Please read the prospectus for more information
USSG Risks: Investing involves risk, including the possible loss of principal. ESG criteria in a fund’s investment strategy does not guarantee a return or protect against a loss. Stocks may decline in value. This fund is nondiversified and can take larger positions in fewer issues, increasing its potential risk. Performance of the fund may diverge from that of the Underlying Index due to operating expenses, transaction costs, cash flows, use of sampling strategies or operational inefficiencies. An investment in this fund should be considered only as a supplement to a complete investment program for those investors willing to accept the risks associated with the fund. Please read the prospectus for more information.
ESEB Risks: Investing involves risk, including the possible loss of principal. Bond investments are subject to interest rate, credit, liquidity and market risks to varying degrees. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. Investing in securities that meet ESG criteria may result in the fund forgoing otherwise attractive opportunities, which may result in underperformance when compared to funds that do not consider ESG factors. Foreign investing involves greater and different risks than investing in US companies, including currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive company information, political instability and differing auditing and legal standards. Emerging markets tend to be more volatile and less liquid than the markets of more mature economies, and generally have less diverse and less mature economic structures and less stable political systems than those of developed countries. This fund is non-diversified and can take larger positions in fewer issues, increasing its potential risk. Performance of the Fund may diverge from that of the Underlying Index due to operating expenses, transaction costs, cash flows, use of sampling strategies or operational inefficiencies. An investment in this fund should be considered only as a supplement to a complete investment program for those investors willing to accept the risks associated with that fund. Please read the prospectus for more information.
ESG investment strategy risk. The funds’ underlying indexes’ ESG methodologies, and thus the indexes’ investment strategies, limit the types and number of investment opportunities available to the indexes and, as a result, the indexes may underperform other indexes that do not have an ESG focus. The underlying indexes’ ESG methodologies may result in the index investing in securities or industry sectors that underperform the market as a whole or underperform other indexes screened for ESG standards. In addition, the index providers may be unsuccessful in creating an index composed of companies that exhibit positive ESG characteristics.
Past performance is no guarantee of future results.
This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction.
Certain statements contained in this release may be forward-looking in nature. These include all statements relating to plans, expectations, and other statements that are not historical facts and typically use words like "expect," "anticipate," "believe," "intend," and similar expressions. Such statements represent management’s current beliefs, based upon information available at the time the statements are made, with regard to the matters addressed. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Management does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. The following factors, among others, could cause actual results to differ materially from forward-looking statements: (i) the effects of adverse changes in market and economic conditions; (ii) legal and regulatory developments; and (iii) other additional risks and uncertainties, including public health crises (including the recent pandemic spread of the novel coronavirus), war, terrorism, trade disputes and related geopolitical events.
S&P and S&P Indexes are service marks of S&P Global and have been licensed for use by DBX. The ETFs are not sponsored, endorsed, issued, sold or promoted by S&P Global nor does this company make any representations regarding the advisability of investing in the ETFs.
The S&P 500 ESG Index is a product of S&P Dow Jones Indices LLC or its affiliates ("SPDJI"), and has been licensed for use by DBX Advisors. S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC ("S&P"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by DBX Advisors. The ESG Scores used in the Index are calculated by RobecoSAM AG. DBX Advisors Xtrackers ETFs are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates or RobecoSAM AG, and none of such parties make any representation regarding the advisability of investing in such ETFs, nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 ESG Index.
Xtrackers J.P. Morgan ESG Emerging Markets Sovereign ETF is not sponsored, endorsed, or promoted by JPMorgan Chase & Co. ("JPMorgan"), and JPMorgan bears no liability with respect to any index on which such funds are based. The accuracy, completeness or relevance of the information which has been obtained from external sources cannot be guaranteed, although it has been obtained from sources reasonably believed to be reliable. Subject to any applicable law, JPMorgan shall not assume any liability in this respect. The index described herein is a proprietary J.P. Morgan index. The funds’ prospectuses contain a detailed description of the limited relationship that JPMorgan has with DBX Advisors LLC.
Alpha - a measure of the active return on an investment. An investment's alpha is the excess return relative to the beta-adjusted market return.
Basis point (bp) - One basis point (bp) equals 1/100 of a percentage point.
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The brand DWS represents DWS Group GmbH & Co. KGaA and any of its subsidiaries such as DWS Distributors, Inc. which offers investment products or DWS Investment Management Americas, Inc. and RREEF America L.L.C. which offer advisory services.
1 The fund has agreed to a contractual fee waiver to last a period of at least one year
2 Source: S&P Dow Jones Indices
3 Source: DWS: Has ESG investing outperformed so far in the pandemic?, July 8, 2020
4 Source: DWS: Xtrackers S&P 500 ESG ETF Data - 2Q20
5 Source: S&P Dow Jones Indices