Industry Updates

DWS sees ESG screens tighten on six ETFs following MSCI index changes

Changes will impact £3.6bn low carbon US ESG ETF

Theo Andrew


DWS has seen the ESG screens tighten on six country and region low carbon ETFs with £8.2bn in assets under management following changes implemented by MSCI.

Effective 1 June, the changes will see the indices add a set of low carbon rules, taking the number of ESG selection rules to three.

As well as high ESG performance selection rules, the six indices will also have low carbon transition risk assessment rules, identifying companies’ exposure to risk and opportunities related to the low carbon transition.

The indices will also apply low carbon emissions rules, removing companies with the highest current carbon emissions from the parent index.

The largest ETFs to be impacted by the changes are the £3.6bn Xtrackers MSCI USA ESG UCITS ETF (XZMU) and the £2bn Xtrackers MSCI World ESG UCITS ETF (XZW0).

The rules will also apply to the £1.2bn Xtrackers MSCI Japan ESG UCITS ETF (XZMJ), the £621m Xtrackers MSCI Europe ESG UCITS ETF (XZEU), the Xtrackers MSCI Emerging Markets ESG UCITS ETF (XZEM) and the £27m Xtrackers MSCI EMU ESG UCITS ETF (XZEZ).

The ETFs, which are labelled Article 8 under the Sustainable Finance Disclosure Regulation (SFDR), will keep their names, tickers and total expense ratios following the changes.

It follows several recent index switches by DWS on its Xtrackers range including the Xtrackers DAX Income UCITS ETF (XDDX) and the Xtrackers MSCI AC Asia ex Japan Swap UCITS ETF (XAXJ).

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