(Boursier.com) — DWS announces the launch of two new Xtrackers ETFs on the US Equity market. These ETFs replicate the S&P 500 index and incorporate environmental and social standards as well as good corporate governance (ESG).
DWS is thus expanding its successful range of Xtrackers S&P 500 ETFs, which has more than 11 billion euros in assets under management (as of November 30, 2022). The UCITS Xtrackers S&P 500 Equal Weight ETF was the first ETF in Europe to track this index when it was launched in 2014.
The Xtrackers S&P 500 ESG UCITS ETF and the Xtrackers S&P 500 Equal Weight ESG UCITS ETF are currently listed on Deutsche Boerse and the London Stock Exchange, with further listings planned. The S&P 500 Index tracks the 500 largest companies in the US stock market by market capitalization and is one of the most important equity benchmarks in the world. The S&P 500 Equal Weight Index tracks the same companies, but each of the 500 constituent stocks is weighted equally, i.e. 0.2%.
The newly launched Xtrackers ETFs track indices that take into account additional criteria to select index members. The S&P 500 ESG Index and the S&P 500 Equal Weight ESG Index initially provide a number of exclusions before screening companies taking into account the E, S and G criteria. For example, companies whose revenues exceed the thresholds fixed for activities related to thermal coal, tobacco and controversial weapons, among others, are excluded.
In addition, companies are excluded for violating international norms and standards, such as the principles of the United Nations Global Compact. Finally, companies that do not have an S&P DJI ESG score are excluded, as well as those that are among the 25% with the worst ESG score of the GICS classification. Second, index members are listed according to their S&P DJI ESG score. For the S&P DJI ESG Score, company data is collected and assessed by S&P Global ESG Research on environmental, social and corporate governance standards. Both the S&P 500 ESG Index and the S&P 500 Equal Weight ESG Index target a fixed percentage of the free float-adjusted market capitalization (FMC) of the S&P 500 using S&P DJI ESG scores. The S&P 500 ESG Index targets 75% of the CMF of the S&P 500 and selects companies from each GICS sector group of the S&P 500 Index with the best ESG score, while the S&P 500 Equal Weight ESG Index targets 60% of FMC using the same process.
As a result, the S&P 500 ESG and S&P 500 Equal Weight ESG indices ultimately include approximately 300 stocks instead of the original 500 stocks. Index methodologies are designed to ensure that ESG indices exhibit similar sector risk characteristics to the original index.
“The importance of ETFs that track the US equity market by integrating environmental, social and governance criteria into a portfolio has grown significantly in recent years. We are pleased to further expand our Xtrackers offering for investors with attractive solutions “, said Simon Klein, global head of passive sales at DWS.
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