Industry Updates

DWS adds ESG screen to Canada and Pacific ex-Japan ETFs

Securities lending will continue on the ETFs

Theo Andrew


DWS is switching the indices on its Canada and Pacific ex-Japan ETFs to include ESG metrics as it continues to ‘green up’ its ETF range.

In a shareholder notice, the German asset manager said it would swap the indices on the £245m Xtrackers MSCI Canada UCITS ETF (XCAN) and the £314m Xtrackers MSCI Pacific ex Japan UCITS ETF (XPXJ).

XCAN will switch from tracking the MSCI Canada TRN index to the MSCI Canada Select ESG Screened index while XPXJ will go from tracking the MSCI Pacific ex Japan TRN index to the MSCI Pacific ex Japan Select ESG Screened index.

As a result of the changes, XCAN will change its name to the Xtrackers MSCI Canada ESG Screened UCITS ETF while XPXJ will be renamed Xtrackers MSCI Pacific ex Japan ESG Screened UCITS ETF under the same ticker and total expense ratios (TER) of 0.35% and 0.25%, respectively.

Both will continue tracking large and medium companies in their respective markets, excluding those that do not meet specific ESG standards.

These include any companies assigned a rating of CCC, those who are involved in controversial weapons or those that breach thresholds in certain activities such as tobacco, nuclear weapons, firearms, thermal coal and oil sands extraction.

Those who fail to comply with the United Nations Global Compact principles will also be excluded.

The ETFs will be classified as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).

DWS said: “The change to the new reference index is proposed as part of the company’s continuous review of its existing product range and due to increased demand for ESG compliant investments.

“Hence, the board of directors deems it to be in the best interests of the shareholders to restructure the sub-fund to reflect the new reference index.”

DWS said it would continue the securities lending programme on the two ETFs, adding it will amend the product prospectus to ensure the transactions will comply with its ESG standards and the minimum ESG screens of the index.

XPXJ will see changes to its securities lending limit as a result, with net assets subject to securities lending transactions raised from 0% to 30% to 0% to 50%.

Last month, DWS said it was planning the switch the indices on two Asia-focused ETFs to ones that track ESG metrics.

Related articles

Featured in this article

Logo for DWS


No ETFs to show.