New Listing

DWS launches biodiversity ETF range

Three ETFs will cover global, US and European equities

Theo Andrew

Olivier article-image

DWS has launched three biodiversity ETFs covering global, Europe and US equities, ETF Stream can reveal.

The Xtrackers World Biodiversity Focus SRI UCITS ETF (XBIO), the Xtrackers Europe Biodiversity Focus SRI UCITS ETF (XBEE) and the Xtrackers USA Biodiversity Focus SRI UCITS ETF (XBUZ) are listed on the Deutsch Boerse today, 3 November, and the London Stock Exchange next week.

The three ETFs have a total expense ratios (TERs) of 0.30%.

They will track the relevant regional ISS Stoxx Biodiversity Focus SRI indices which have a “multi-stage filter”.

Firstly, companies with activities – producers of palm oil or pesticides – that are “demonstrably detrimental” to biodiversity are excluded from the investment universe.

The remaining businesses with the “strongest negative impact” on biodiversity within an economic sector are also excluded, according to the ISS ESG Biodiversity Impact Assessment Tool.

In addition, biodiversity and climate-related United Nations Social Development Goals are included in the selection process.

A filter will also be applied to reduce the carbon intensity of the portfolio by at least 50% compared to the broad market index.

Olivier Souliac (pictured), head of indexing Xtrackers products at DWS, said: “With these ETFs, investors can transparently reduce the risks associated with the decline in biodiversity for their broadly diversified equity investments.

“This is an important addition to our range of sustainability-oriented investments.”

The launch comes as the investment world increasingly turns its focus towards biodiversity as both an ecological and economical issue.

Index providers have been rushing to develop indices that can accurately capture the theme but many still believe the data is in its early stages.

The World Economic Forum predicts the loss of biodiversity will have the third-largest negative impact on humanity over the next decade, behind climate change and extreme weather.

DWS follows several other issuers that have launched biodiversity ETFs over the past year, including HSBC Asset Management, BNP Paribas Asset Management and AXA Investment Managers.

Earlier this week, DWS launched the Xtrackers MSCI Emerging Markets Climate Transition UCITS ETF (XEMC), “completing” its CTP range.

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