The asset management arm of Deutsche Bank, DWS, has expanded its responsible investment range with the launch of an environmental, social and governance (ESG) ETF, offering exposure to emerging markets.
The Xtrackers ESG MSCI Emerging Markets UCITS ETF (XZEM) has listed on the London Stock Exchange with an annual fee of 0.25%.
XZEM tracks the MSCI Emerging Market ESG Leaders Low Carbon Ex Tobacco Involvement index. The selection process of the fund’s holdings includes a screen based on ESG requirements and another based on carbon emissions.
Companies within the nuclear power, controversial weapons or tobacco production are excluded as well as companies that receive a significant portion of its revenue from alcohol or gambling.
The carbon emission screener assesses the remaining companies and scores them on their current and potential emissions. Scores that surpass the required threshold are then removed from XZEM.
Manooj Mistry (pictured), head of index investing at DWS, said in a statement: “The expansion of our ESG Xtrackers range to cover emerging market equities will provide investors with an efficient new tool for taking exposure to this important area of the market.”
XZEM joins Xtrackers' five-strong range of ESG ETFs with the other products offering exposure to World, Japan, USA and European equities as well as a euro corporate bond ETF.