Lyxor has become the first ETF issuer to offer exposure to the DAX with an environmental, social and governance (ESG) tilt.

The Lyxor DAX 50 ESG UCITS ETF (E909) is listed on Xetra with a total expense ratio (TER) of 0.23%.

E909 tracks the DAX ESG index, designed by Deutsche Börse-owned Qontigo, which offers investors exposure to 50 companies with the strongest ESG rating.

The selection universe is the HDAX index, which includes equities that are part of the DAX, MDAX and TecDAX indices and consists of 99 securities.

The companies in the universe are assessed using Sustainalytics’ Global Standards Screening assessment and any involved in controversial weapons, tobacco, thermal coal, nuclear power and military contracting are removed.

The remaining companies are ranked according to ESG score, free float market capitalisation and stock exchange turnover volume.

The ranking of the index positions ultimately results from the market capitalisation, with a 7% weighting limit for each company in the index.

E909 is passported to Germany, Austria and Luxembourg.

ESG investors don’t have to compromise on performance, Lyxor says

Arne Scheehl (pictured), head of product development at Lyxor ETF, commented: “German investors are increasingly looking for financial instruments that allow them to invest in German stocks with ESG filters.

"With our ETF tracking the DAX 50 ESG index, we are offering investors for the first time the opportunity to invest in a German share index using an ESG selection process."

Stephan Flaegel, global head of indices and benchmarks at Qontigo, added: “The DAX 50 ESG index was created with the ambition to become the go-to benchmark for sustainable equity investments in Germany.

“With its robust framework and transparent methodology, the index is a liquid representation of the German equity market that enhances the sustainable profile of a portfolio.”

With the launch of E909, Lyxor is following a trend of tracking well-known indices and adding an ESG tilt.

This was kicked-off by UBS Asset Management last year when it launched the UBS S&P 500 ESG UCITS ETF (5ESG) in April 2019.

The Swiss asset manager also launched the first Euro Stoxx 50 ETF with an ESG tilt last August.

Lyxor's new launch is a signal of its intent in Germany after the French asset manager completed the acquisition of Commerzbank's ETF range late last year.

Highlighting this, the firm hired Heike Fürpaß-Peter earlier this month to head its ETF business for the region of Germany and Austria.

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