DWS has expanded its environmental, social and governance (ESG) ETF range with the launch of a short-duration corporate bond product, ETF Stream can reveal.
The Xtrackers ESG EUR Corporate Bond Short Duration UCITS ETF (XZE5) is listed on the London Stock Exchange (LSE) with a total expense ratio (TER) of 0.16%.
XZE5 is set to list on the Deutsche Boerse on 8 August.
Tracking the Bloomberg Barclays MSCI Euro Corporate Sustainable and SRI 0-5 Year index, XZE5 offers investors exposure to euro-denominated investment grade bonds with maturity between 1 month and 5 years.
The ETF also incorporates MSCI’s ESG ratings which overweights and underweights issuers versus the parent index depending on a security’s sustainability score.
Only bonds issued by companies with an MSCI ESG rating of BBB and an MSCI ESG controversy score of 1 or above are included.
Furthermore, companies involved in alcohol, tobacco, gambling, adult entertainment, genetically modified organisms, nuclear power and civilian firearms and certain military weapons are also excluded.
XZE5 has been seeded with €24.4m.
ETF Insight: Are ETF and index providers taking ESG seriously?
The ETF is an extension of the €642m Xtrackers ESG EUR Corporate Bond UCITS ETF (XB4F) which was launched in October 2010.
XZE5 is the seventh ESG ETF in DWS’s Xtrackers range with the other products offering exposure to global, Japanese, US, emerging markets and European equities as well as XB4F. The range currently has $2.8bn AUM.