DWS : These two new ETFs actively invest in stocks of large or small companies with high levels of research and development activities in green technologies.
By ETFWorld.co.uk
Michael Mohr, Global Head of Xtrackers Products at DWS
– Fee charges are 0.35% plus 0.45% per annum.
– These ETFs expand Xtrackers’ range of products offering access to equities based on environmental criteria.
DWS continues to expand its universe of Xtrackers ESG products with two new actively managed ETFs that invest globally in stocks of large and small companies in developed economies: the Xtrackers World Green Transition Innovators UCITS ETF 1C (ISIN: LU2859392081) and the Xtrackers World Small Cap Green Transition Innovators UCITS ETF (ISIN: LU2859297330). These ETFs allow investors to invest in companies characterised by a high level of research and development activities in green technologies, backed by their respective patent portfolios.
The transformation of the economy towards climate neutrality and resource conservation remains a key sustainability objective for the United Nations (UN) and the European Union (EU). Xtrackers’ two Green Transition Innovators (GTI) ETFs offer an innovative and forward-looking approach to select companies that are particularly prominent in the green transition.
‘The Xtrackers World Green Transition Innovators ETFs are of interest to investors looking to incorporate a green technology and innovation-focused component to their portfolios,’ explains Michael Mohr, Global Head of Xtrackers Products at DWS.
Objective and transparent patent data has proven to be useful in assessing the innovative capacity of companies. The assignment of patents to Environmentally Sound Technologies (ESTs) is standardised by the World Intellectual Property Organization (WIPO). Patent activity can be considered an indicator of superior performance and profit growth. Studies have established a correlation between the number of patents granted and past value growth.
DWS has commissioned Index Capital GmbH, as allocation agent, to advise on the portfolio composition of the new funds. Index Capital specialises in developing and implementing scientific concepts for portfolio management. CEO Andreas Beck said: ‘International sustainability goals can only be achieved through innovation. The innovation-focused ETFs in Green Transition follow this market-based logic’.
Patent databases are currently being analysed for Index Capital GmbH by Quant IP GmbH. The data is based on the IPC Green Inventory of the World Intellectual Property Organization, which provides access to patent information related to environmentally friendly technologies. ‘Our evaluations of global patent databases enable Green Transition innovation ETFs to reach a new quality standard in terms of data depth, objectivity and transparency in sustainable investments,’ explains Lucas von Reuss, Managing Director.
The Xtrackers World Green Transition Innovators UCITS ETF invests in approximately 200 leading companies in various sectors around the world. The largest individual positions include Microsoft and Nvidia, each with a weighting of approximately 8% within the ETF. In addition to technology stocks, the ETF invests in financial services providers, healthcare and consumer retail companies, among others.
| Product Name | Xtrackers World Green Transition Innovators UCITS ETF |
| ISIN | LU2859392081 |
| SEDOL | BSY5VW5 |
| Trading Currency | USD |
| Management Fee | 0.35% |
The Xtrackers World Small Cap Green Transition Innovators UCITS ETF invests in around 200 leading companies from diverse sectors with small and mid-sized market capitalisations globally. The largest positions include Guardant Health Inc (3.8% weight), Lyft Inc (2.7%) and Puma SE (2.5%). The main sectors are industrials, information technology, consumer staples and healthcare. Both the sectors and individual companies in both ETFs are weighted, based on market capitalisation, making these ETFs suitable as core investments that reflect the performance of the broader equity market.
| Product Name | Xtrackers World Small Cap Green Transition Innovators UCITS ETF |
| ISIN | LU2859297330 |
| SEDOL | BSY5VX6 |
| Trading Currency | USD |
| Management Fee | 0.45% |
Source: ETFWorld.co.uk
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