Xtrackers by DWS Launches its First Active ETF: NRES

Rhea-AI Summary

DWS introduces the Xtrackers RREEF Global Natural Resources ETF (NRES) to provide exposure to global natural resources companies through an actively managed fund. The ETF aims for total return from capital appreciation and income, not linked to a specific index. DWS enters the actively managed ETF market in the US, combining its expertise in liquid real assets with the Xtrackers platform. The Fund targets various resource subsectors and is managed by DWS ETF portfolio managers based on a target allocation by Liquid Real Assets (LRA) managers. With a focus on inflation-resilient assets, the Fund aims to capitalize on opportunities in a post-COVID inflationary cycle. DWS believes natural resource equities offer protection in a period of mild price increases due to factors like growing global population and supply constraints. The Fund provides strategic diversification with strong balance sheets and healthy cash flow from resource companies. The S&P Global Natural Resource Index includes 90 major companies with a market cap of $4 trillion, offering diversified equity exposure across agribusiness, energy, and metals & mining sectors. The Fund's net/gross expense ratios are 0.45%, and DWS plans to continue launching innovative ETFs to cater to investor needs.

Insights

Financial Analyst

The introduction of DWS' Xtrackers RREEF Global Natural Resources ETF represents a strategic move into the actively managed ETF space, a segment experiencing significant growth. With a focus on natural resource companies, the ETF aims to capitalize on sectors traditionally known for their inflation-resilient characteristics. The fund's active management approach, as opposed to a passive index replication, suggests a tailored strategy to navigate the dynamic commodities market. This could be attractive to investors seeking to hedge against inflation and diversify their portfolios amidst current economic pressures such as supply constraints and deglobalization trends.

From a financial perspective, the Fund's competitive expense ratio of 0.45% positions it well within the market, potentially attracting cost-conscious investors. Moreover, the robust AUM of DWS' Alternatives platform and its history of active investing lend credibility to the new ETF, which could influence investor confidence. However, the true test of the Fund's performance will be its ability to generate returns that justify the active management approach, particularly in comparison to passive index funds which often have lower fees.

Market Research Analyst

Examining the broader ETF market, the launch of the Xtrackers RREEF Global Natural Resources ETF by DWS aligns with the increasing investor appetite for specialized and sector-specific investment vehicles. The emphasis on natural resources reflects a strategic anticipation of upward pressure on commodity prices due to factors such as a growing global population and supply constraints. The ETF's active management component is designed to leverage these market dynamics to the advantage of investors.

Significantly, the comparison of the S&P Global Natural Resource Index's market cap with that of a tech giant like Microsoft underscores the substantial scale of the natural resources sector. This highlights the potential for diversification and growth within the ETF, which could be a compelling narrative for investors. The Fund's success will hinge on its ability to navigate the complexities of strategic themes and commodity-price cycles, which requires deep sector expertise—a key selling point emphasized by DWS.

Commodities Expert

The Xtrackers RREEF Global Natural Resources ETF's investment focus on subsectors such as metals, energy, agriculture and forestry is indicative of a targeted approach to commodities investment. The Fund's active management strategy is particularly relevant given the cyclical nature of commodity prices and the need for nuanced understanding of factors influencing supply and demand. For instance, the interplay of electric vehicle adoption rates and copper production illuminates the intricate dependencies within the commodities market.

Furthermore, the Fund's emphasis on companies with strong balance sheets and healthy free cash flow suggests a selective approach that prioritizes financial stability and the potential for shareholder returns. This approach aligns with the broader trend of seeking investments in companies that are well-positioned to navigate economic fluctuations and deliver consistent returns. However, the success of such a strategy will depend on the portfolio managers' ability to accurately forecast and capitalize on market trends and shifts within the commodities landscape.

Global Natural Resources Fund Combines Strength of DWS’ Xtrackers Platform and Liquid Real Assets Expertise

NEW YORK--(BUSINESS WIRE)-- DWS, one of the world's leading asset managers, announced today the listing of its first actively-managed exchange-traded fund (ETF), the Xtrackers RREEF Global Natural Resources ETF (NASDAQ: NRES) (the “Fund”). The Fund is designed to provide investors with exposure to global natural resources (GNR) companies primarily through investments in equity and equity related securities. The Fund seeks total return from both capital appreciation and current income and, as an actively managed ETF, does not seek to replicate the performance of a specific index.

For DWS, this listing marks its entry into the fast-growing actively managed ETF market in the US¹. “More and more investors are recognizing the advantages of this form of investment. Active strategies can adapt to a wide range of market conditions, especially in times of great uncertainty,” says Arne Noack, Head of Systemic Investment Solutions, Americas. “Adding the actively managed Xtrackers RREEF Global Natural Resources ETF to our range of US-listed ETFs, combines two of DWS’ global core competencies and expands the range of best-in-class specialty investment solutions, while leveraging the liquidity, cost efficiency, transparency, and potential tax benefits of the ETF structure.”

The Fund seeks to identify and capitalize on opportunities across a variety of resources subsectors including metals, energy, agriculture, paper & forestry. The Fund will be managed by seasoned DWS ETF portfolio managers based on a target allocation provided by DWS Liquid Real Assets (LRA) portfolio managers Avi Feinberg, Darwei Kung, and John Vojticek. The Fund’s target allocation is continuously reviewed by the LRA portfolio management team and adjusted as necessary.

“During the post-COVID inflationary cycle, investor portfolios were under-allocated to inflation-resilient assets. Because government deficits and debts have continued to expand, we believe natural resource equities provide a timely opportunity to protect capital in a prolonged period of gentle or minor price increases,” noted John Vojticek, Head of Liquid Real Assets.

At a time when powerful forces including a growing global population, supply constraints, and deglobalization are pressuring commodity prices upward, DWS believes global natural resources can provide strategic diversification to client portfolios. Our DWS market insights reveal that resource companies broadly have strong balance sheets, generate healthy free cash flow, and can continue to return capital to shareholders via dividends and share buybacks.

The S&P Global Natural Resource Index includes 90 of the largest publicly-traded companies in natural resources and commodities businesses that meet specific investability requirements, offering investors diversified and investable equity exposure across three primary commodity-related sectors: agribusiness, energy, and metals & mining, with a market capitalization of $4 trillion. By comparison, the tech giant Microsoft alone has a market cap of around $3 trillion. To succeed in the GNR space it is crucial to understand how strategic themes, commodity-price cycles and linkages across sectors, and management incentives converge to create investment opportunities. For example, copper production growth will likely depend on the pace of electric vehicle adoption, the cost of substitutes such as gasoline or aluminum, copper companies’ cost of capital, government policies that impact the access to reserves and cost of production, etc. Base metals & mining companies would be poised to harness a trend of growing demand vs. challenges to develop new supplies.

“With the launch of Xtrackers RREEF Global Natural Resources ETF, we are connecting the dots of our firm’s global capabilities to present the “best of DWS” to the market in an area thoughtfully selected to provide investors with our expertise in both alternative investing and ETF management. As an actively managed ETF in the GNR segment, we believe the Fund provides an innovative, specialized, and differentiated investment solution in a competitive environment,“ said Henry Wu, Head of Xtrackers Products US. DWS' robust Alternatives platform has a 50-year history of active investing for institutional, corporate, and sovereign clients worldwide. With $120 billion in assets under management as of September 30^th, 2023, DWS is one of the world's leading fiduciary managers for alternative investments. Of this amount, $28 billion was invested in Liquid Real Assets (LRA) strategies with active track records dating back to 1993.

Within this investment universe there is tremendous dispersion, which requires special expertise. “For specific asset classes and sub-asset classes, it is clear that managers with experienced teams and proven processes are best positioned to identify investment opportunities,” says Amanda Rebello, Head of Xtrackers Sales, US Onshore. The Fund’s US-based LRA portfolio managers cover both commodities and GNR equities. With comprehensive expertise in both asset classes, DWS has the research depth and competitive advantage to add value for investors.”

The Fund is competitively priced with net/gross expense ratios of 0.45%.

As of February 16, 2024, the Xtrackers U.S. product suite has $20.5 billion USD in assets under management.² Since January 2023, Xtrackers by DWS has launched 8 ETFs and has plans to continue to approach the market with innovative, cost disruptive strategies that give investors building blocks to various types of exposures.

To learn more about Xtrackers ETFs available in the U.S., please visit www.etf.dws.com/en-us/etf-products/.

Note to Editors: Xtrackers’ Global Business

Globally, Xtrackers by DWS is a large and established provider of high-quality exchange traded funds (ETFs) and exchange traded commodities (ETCs). Providing efficient “passive” exposure to diversified indices or to single commodities, Xtrackers ETFs and ETCs provide a comprehensive set of dependable investment tools for effective portfolio allocation.

Xtrackers are listed on seven stock exchanges globally and have approximately $167 billion in assets under management as of February 16, 2024, making Xtrackers one of the largest providers of ETFs and ETCs by AUM.²

About DWS Group

DWS Group (DWS) with EUR 896bn of assets under management (as of December 31, 2023) aspires to be one of the world's leading asset managers. Building on more than 60 years of experience, it has a reputation for excellence in Germany, Europe, the Americas and Asia. DWS is recognized by clients globally as a trusted source for integrated investment solutions, stability and innovation across a full spectrum of investment disciplines.

We offer individuals and institutions access to our strong investment capabilities across all major liquid and illiquid asset classes as well as solutions aligned to growth trends. Our diverse expertise in Active, Passive and Alternatives asset management complement each other when creating targeted solutions for our clients. Our expertise and on-the-ground knowledge of our economists, research analysts and investment professionals are brought together in one consistent global CIO View, giving strategic guidance to our investment approach.

DWS wants to innovate and shape the future of investing. We understand that, both as a corporate as well as a trusted advisor to our clients, we have a crucial role in helping navigate the transition to a more sustainable future. With approximately 4,500 employees in offices all over the world, we are local while being one global team. We are committed to acting on behalf of our clients and investing with their best interests at heart so that they can reach their financial goals, no matter what the future holds. With our entrepreneurial, collaborative spirit, we work every day to deliver outstanding investment results, in both good and challenging times, to build the best foundation for our clients’ financial future.

IMPORTANT INFORMATION

ETF shares are not individually redeemable, and owners of shares may acquire those shares from a Fund or tender such shares for the redemption to the Fund in Creation Units only.

Consider the Fund’s investment objective, risk factors and charges and expenses before investing. This and other important information can be found in the Fund’s prospectus, which may be obtained by calling 1-844-851-4255 or by viewing or downloading a prospectus at www.Xtrackers.com. Please read it carefully before investing.

The brand Xtrackers represents all systematic investment solutions. ETFs in the U.S. are managed by DBX Advisors LLC (the “Advisor”) and distributed by ALPS Distributors, Inc. (“ALPS”). RREEF America L.L.C. acts as the Fund’s subadvisor (the “Subadvisor”). The Advisor and Subadvisor are indirect, wholly owned subsidiaries of DWS Group GmbH & Co. KGaA and are not affiliated with ALPS.

Investing involves risk, including the possible loss of principal. Stocks may decline in value. There are special risks associated with natural resources investments; this means that the fund is more vulnerable to the price movements that particularly affect one or more of the various industries and sub-industries within the natural resources sector. Funds investing in a single industry, country or in a limited geographic region generally are more volatile than more diversified funds. This fund is non-diversified and can take larger positions in fewer issues, increasing its potential risk. An investment in this fund should be considered only as a supplement to a complete investment program for those investors willing to accept the risks associated with the fund. Please read the prospectus for more information.

Past performance is no guarantee of future results.

War, terrorism, sanctions, economic uncertainty, trade disputes, public health crises and related geopolitical events have led, and, in the future, may lead to significant disruptions in U.S. and world economies and markets, which may lead to increased market volatility and may have significant adverse effects on the fund and its investments.

This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction.

Certain statements contained in this release may be forward-looking in nature. These include all statements relating to plans, expectations, and other statements that are not historical facts and typically use words like “expect,” “anticipate,” “believe,” “intend,” and similar expressions. Such statements represent management’s current beliefs, based upon information available at the time the statements are made, with regard to the matters addressed. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Management does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. The following factors, among others, could cause actual results to differ materially from forward-looking statements: (i) the effects of adverse changes in market and economic conditions; (ii) legal and regulatory developments; and (iii) other additional risks and uncertainties, including public health crises, war, terrorism, trade disputes and related geopolitical events.

NOT FDIC/ NCUA INSURED • MAY LOSE VALUE • NO BANK GUARANTEE

The brand DWS represents DWS Group GmbH & Co. KGaA and any of its subsidiaries such as DWS Distributors, Inc., which offers investment products, or DWS Investment Management Americas, Inc. and RREEF America L.L.C., which offer advisory services. R-099954 (02/25) DBX05883 (02/25)

¹ With $444 billion in assets as of October 2023—almost triple the amount from October 2020. https://www.morningstar.com/etfs/constellation-factors-powering-active-etfs-meteoric-rise

² Source: Bloomberg as of 02/16/2024.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240227308576/en/

For further information:

Kenny Juarez

+1 (212) 454-9994

kenny.juarez@dws.com

Brendan Moffitt

+1 (212) 454-0013

brendan.moffitt@dws.com

Source: DWS

FAQ

What is the ticker symbol for the Xtrackers RREEF Global Natural Resources ETF?

The ticker symbol for the Xtrackers RREEF Global Natural Resources ETF is NRES.

What is the total return objective of the Xtrackers RREEF Global Natural Resources ETF?

The Xtrackers RREEF Global Natural Resources ETF aims for total return from both capital appreciation and current income.

What is the net/gross expense ratio of the Xtrackers RREEF Global Natural Resources ETF?

The Xtrackers RREEF Global Natural Resources ETF has net/gross expense ratios of 0.45%.

What sectors does the S&P Global Natural Resource Index cover?

The S&P Global Natural Resource Index includes sectors like agribusiness, energy, and metals & mining.

How much in assets under management does the Xtrackers U.S. product suite have as of February 16, 2024?

As of February 16, 2024, the Xtrackers U.S. product suite has $20.5 billion USD in assets under management.