New Listing

DWS unveils two corporate green bond ETFs

The ETFs offer exposure to corporate bonds used to finance environmental projects

Jamie Gordon

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DWS has launched two investment grade green bond ETFs that have been seeded by Luxembourg private bank Quintet.

The Xtrackers EUR Corporate Green Bond UCITS ETF (XGBE) and Xtrackers USD Corporate Green Bond UCITS ETF (XGBU) are both listed on the Deutsche Boerse with total expense ratios (TER) of 0.25%.

Physically-replicated, the ETFs track their corresponding currency versions of the newly developed Bloomberg Barclays MSCI Corporate and Agency Green Bond index.

To qualify for inclusion in the benchmarks, bonds must be rated as investment grade, with proceeds designated to the financing of climate and environmental projects.

The strategies also apply ESG filters based on issuers’ business involvements and controversies.

Quintet is the seed investor in the ETFs and will feature the products in their discretionary portfolios, having worked with DWS during the products’ development phase.

The ETFs are classified as Article 9 of the Sustainable Finance Disclosure Regulation (SFDR).

Michael Mohr, head of passive product development at DWS, said: “Green bond issuance is booming, but most green bond indices are biased towards sovereign and supra-national debt.  

“The ETFs have been constructed to provide investors with exposure to the corporate and corporate-related agency bond segment of this rapidly developing market.”

Accompanying the launches, DWS has also listed the euro-hedged Xtrackers USD Corporate Green Bond UCITS ETF (XGUE) with the same fee attached.

The new launches follow lighter green corporate bond arrivals from DWS last year, including the Xtrackers ESG EUR Corporate Bond Short Duration UCITS ETF (XZE5) in July and the Xtrackers ESG USD Corporate Bond UCITS ETF (XZBU) in September.

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