Industry Updates

DWS switches Asia ex-Japan ETF to ESG index

Tracking companies with lower carbon exposure

Theo Andrew


DWS has switched to an ESG index on its all-countries Asia ex-Japan ETF as it continues to green up its ETF range.

Effective 12 May, the £408.8m Xtrackers MSCI AC Asia ex Japan Swap UCITS ETF (XAXJ) has seen its index switch from the MSCI AC Asia ex Japan TRN index to the MSCI AC Asia ex Japan Low Carbon SRI Leaders Capped index.

The ETF has been renamed Xtrackers MSCI AC Asia ex Japan ESG Swap UCITS ETF following the switch, keeping the same ticker and total exchange ratio (TER) of 0.65%.

The new index will track companies with lower carbon exposure than that of the broad market in developed and emerging markets in Asia, excluding Japan.

Furthermore, companies in the index will be weighted by their free float-adjusted market capitalisation capped at 10%.

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

“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,” DWS said.

“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.”

The German issuer added the switch to ESG indices across its ETF product range is due to ongoing investor demand.

Earlier this month, DWS announced plans to switch the index on another ex-Japan product, the £314m Xtrackers MSCI Pacific ex Japan UCITS ETF (XPXJ) alongside the £245m Xtrackers MSCI Canada UCITS ETF (XCAN).

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

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