DWS : Xtrackers offers Nordic region equity ETF aligned with Paris Agreement
Hauge Eirik Fellesordningen for AFP
- Xtrackers Nordic Net Zero Pathway Paris Aligned UCITS ETF provides exposure to European Nordic equity and aligns with the requirements of the EU Paris Aligned Benchmark (PAB) regulation
- Climate-related metrics and targets of companies are decisive for tilting individual stock weights in the index
- Xtrackers now offers seven equity ETFs tracking Paris-aligned benchmarks and thereby extends its global range of climate-related ETFs to 19 products on its US and European platforms managing close to EUR 6 billion in assets.
DWS has launched a new Xtrackers ETF based on European Nordic equity markets, aligned with the goals of the 2015 Paris Climate Agreement. Including the new ETF, DWS has already launched seven equity ETFs based on the same index methodology, providing exposure to the following equity markets: Global industrial and emerging markets, USA, Japan, Europe, Eurozone and now Nordics.
The Xtrackers Nordic Net Zero Pathway Paris Aligned UCITS ETF will approach EUR 100million of assets as committed by investors and is listed on Deutsche Boerse and the London Stock Exchange. The ETF aims to reduce emissions in line with the objectives of the Paris Agreement, with the underlying index therefore corresponding to EU Paris Aligned Benchmark (PAB) regulations. Specifically, the ETF tracks the Solactive ISS ESG Nordic Net Zero Pathway Index. The index aims to represent companies that comply with the regulations of the EU Paris-Aligned Benchmarks (EU PAB).
The index provides a 50% reduction in carbon intensity versus the corresponding non-ESG market benchmark, and a 7% year-on-year ongoing decarbonization pathway. In addition, the series takes into consideration the recommendations of the Net Zero Investment Framework[1] from the IIGCC (Institutional Investors Group on Climate Change), reweighting components according to carbon intensity and to their commitment to the Science Based Target Initiative (SBTI)[2] and Task Force on Climate-related Financial Disclosures (TCFD) reporting standards[3]. The index members are overweighted through three distinct pillars: adoption of science-based targets, high climate disclosure standards, and mitigating climate change via ‘green’ revenues. Climate metrics are therefore the primary determinant of index member weighting.
“The new ETF further underlines Xtrackers’ commitment to the Nordic region und reflects the strong demand for climate focused exposure from Nordic investors. We have worked closely with the investment team of Fellesordningen for AFP in developing this index to meet the requirements for a well-diversified index still maintaining similarities to traditional core Nordic benchmarks”, says Peter Lidblom, Head of Xtrackers Nordic.
“It has been a great collaboration over the past months with Xtrackers in developing this index solution combining the focus on Nordic equities and specific emission reduction targets”, says Eirik Hauge, Senior Portfolio Manager at Fellesordningen for AFP.
Product Table
| Xtrackers Nordics Net Zero Pathway Paris Aligned UCITS ETF | |
| ISIN | IE000HT7E0B1 |
| Ticker | XNZN |
| TER p.a. | 0.15% |
| Underlying Index | Solactive ISS ESG Nordic Investable Universe Net Zero Pathway Index |
| Income treatment | Capitalizing |
| Fund Currency | EUR |
[1] The Institutional Investors Group on Climate Change (IIGCC) is the European membership body for investor collaboration on climate change. Its mission is to support the investment community in driving significant progress towards net zero by 2030. https://www.iigcc.org/resource/net-zero-investment-framework-implementation-guide/
[2] The Science Based Targets Initiative SBTI aims to align emissions reductions and net-zero targets in line with climate science.
[3] The Financial Stability Board created the Task Force on Climate-related Financial Disclosures to improve reporting of climate-related financial information.
Source: ETFWorld.co.uk
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