Industry Updates

DWS to extend SDG suite with social fairness ETF in Q1

The launch will take their SDG range to eight

Theo Andrew

Stefan Hoops

DWS is expanding its Sustainable Development Goal (SDG) range with the launch of a social fairness ETF in the first quarter of this year.

The Xtrackers MSCI Global SDGs Social Fairness Contributors UCITS ETF will take the number of products in its SDG range to eight and will come just over a year after it launched the suite.

It will track the MSCI ACWI IMI SDG Social Fairness Select index and comes as the German asset manager looks to grow its thematic ESG range across active, passives and alternatives.

The index aims to positively contribute to SDGs 1, 2, 4, 5, 8, and 10.

The seven ETFs have amassed €388m in assets since launch, the largest of which is the €132m Xtrackers MSCI Global SDG 3 Good Health UCITS ETF (SDG3).

‘Stellar’ 2023

DWS revealed the new ETF in its annual results and follows a strong year for the group’s Xtrackers range, recording €21.2bn of net new inflows in 2023.

Commenting on the flows, Stefan Hoops (pictured), CEO of DWS, said: “Passives including Xtrackers concluded a stellar year in 2023.

“This reinforced our position as the number two exchange-traded product (ETP) provider by net inflows in Europe in 2023 and supports our goal to reclaim the number two positions by assets in the region.”

The firm said it grew its European ETF market share to 10.2% last year and added it has continued to outpace its competitors in the first month of 2024.

DWS remains third in the overall rankings with €174bn assets under management (AUM), behind Amundi which currently has €212bn AUM following €11.2bn inflows in 2023.

BlackRock remains the largest issuer in Europe with a 43.7% market share housing €738bn AUM.

DWS recorded inflows into passives totalling €4.4bn in Q4, led by flows into Xtrackers ETFs from EMEA retail investors.

“Flows in the fourth quarter were dominated by investment in Xtrackers by EMEA retail investors. Our Xtrackers ETF business reported net inflows of €5.9bn which was slightly offset by redemptions in institutional mandates,” Dr Markus Kobler, chief financial officer at DWS said.

ETFs on DWS’s roster with over €1bn assets grew from 45 to 52 in 2023 and it expects Xtrackers to drive net flows higher across is business in 2024.

Despite this, adjusted revenues fell by 3% in 2023 to €2.7bn, due to greater flows into cheaper passive and cash-based products. DWS said it expects revenue to be flat in 2024.

In November, DWS slashed fees on 31 ETFs and its gold-ETP, the DWS IE Physical Gold ETC Securities (XDGU), as price competition heats up in Europe.

Following its results, the asset manager’s share price was 7.4% down as of 10.45am.

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