New Xtrackers ETF Puts U.S. Equity Investors on the Net Zero ‘Pathway’

Rhea-AI Summary

DWS has launched the Xtrackers Net Zero Pathway Paris Aligned U.S. Equity ETF (NYSE: USNZ), which aims to support the transition to a net-zero economy. This ETF is aligned with Paris Climate Accords, featuring a unique Paris Aligned Benchmark (PAB) index that reduces carbon intensity by 50% compared to traditional U.S. equity indices. The ETF consists of 386 large and mid-cap U.S. stocks and has a low expense ratio of 0.10%. The launch expands DWS's ESG-focused ETF lineup, which now totals $4.2 billion.

Positive

• Launch of Xtrackers Net Zero Pathway ETF (USNZ) aligning with net-zero emissions goals.
• ETF offers a 50% reduction in carbon intensity compared to standard equity indices.
• Expense ratio of just 0.10% makes it a cost-effective investment option.
• Expansion of DWS's ESG-focused ETF lineup to $4.2 billion.

Negative

• None.

NEW YORK--(BUSINESS WIRE)-- DWS, one of the world’s leading asset managers, announced today the launch of a new Xtrackers exchange-traded fund (ETF). It provides large and mid-cap U.S. equity exposure aligned with an internationally recognized framework and is designed to capture the move of the global economy to a net zero emissions environment.

Xtrackers Net Zero Pathway Paris Aligned U.S. Equity ETF (NYSE Ticker: USNZ) listed today on the New York Stock Exchange and is designed to align with the objective of transforming economies to net zero. It provides exposure to a unique Paris Aligned Benchmark (PAB) index that uses a transparent set of rules that aim to be at the cutting edge of sustainable investment practices¹. The index is designed to provide a 50% reduction in carbon intensity² versus a market capitalization weighted U.S. equity index³, and a carbon intensity reduction trajectory of 7% year-on-year. It provides an evidence-based, statistically driven ‘pathway’ to net zero, aligned with the Paris Climate Accords and their two main objectives: to achieve a net zero emissions economy by 2050 and limit the rise in global temperature by 1.5°C above pre-industrial levels.

“There is a clear need for investments that align with net zero aims. USNZ provides a powerful net zero investment strategy that meets the latest regulatory standards” that govern Paris aligned benchmark indices as defined above,” said Arne Noack, Head of Systematic Investment Solutions, Americas, at DWS. “DWS has a long history of providing ETF investors with specialist investment opportunities that combine the efficiency of passive investing with the advantages of well thought out, rules-based strategies for particular needs. This new listing is another example of that.”

In addition to meeting PAB regulations, the index also aims to comply with recommendations published by the Institutional Investors Group on Climate Change (IIGCC)*, specifically its Net Zero Investment Framework.

DWS engaged with index provider Solactive to develop the index, which is called the Solactive ISS ESG United States Net Zero Pathway Enhanced Index. It consists of 386 U.S. large and mid-cap stocks and is re-balanced semi-annually⁴.

Amanda Rebello, Head of Passive Sales at DWS, U.S. Onshore, commented: “Our clients are keen to play a positive role in helping society reach net zero, and we are confident that this new ETF, with its rigorous index methodology run by Solactive, can help seek to meet that need.”

Xtrackers Net Zero Pathway Paris Aligned U.S. Equity ETF has a gross/net expense ratio of 0.10% per annum, though subject to change.

The launch augments the extensive $4.2 billion line-up of ESG and climate focused Xtrackers ETFs in the U.S. (Source: DWS, June 22, 2022), spanning all major asset classes.

About DWS

DWS Group (DWS) is one of the world's leading asset managers with EUR 902bn of assets under management (as of 31 March 2022). 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 asset classes and solutions aligned to growth trends. Our diverse expertise in Active, Passive and Alternatives asset management – as well as our deep environmental, social and governance focus – 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, which guides our investment approach strategically.

DWS wants to innovate and shape the future of investing: with approximately 3,600 employees in offices all over the world, we are local while being one global team. We are investors – entrusted to build the best foundation for our clients’ future.

IMPORTANT INFORMATION

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

Consider each fund’s investment objectives, 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 1-855-DBX-ETFS (1-855-329-3837) or by viewing or downloading a prospectus at www.Xtrackers.com. Please read it carefully before investing.

Xtrackers ETFs are managed by DBX Advisors LLC (the Advisor), and distributed by ALPS Distributors, Inc. (ALPS). The Advisor is a wholly owned subsidiary of DWS Group GmbH & Co. KGaA, and is not affiliated with ALPS.

Investing involves risk, including the possible loss of principal. Stocks may decline in value. Incorporation of ESG criteria in the fund’s investment strategy does not guarantee a return or protect against a loss, limits the types and number of investment opportunities available to the fund and, as a result, the fund may underperform other funds that do not have an ESG focus. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the fund’s ability to invest in accordance with its investment policies and/or achieve its investment objective, as well as the ability of certain classes of investors to invest in funds following an ESG strategy such as the fund. The Underlying Index’s methodology for identifying companies attempting to reduce their carbon footprint limits the types and number of investment opportunities available to the fund and, as a result, the fund may underperform other funds that do not follow a carbon reduction strategy. This fund is non-diversified and can take larger portions in fewer issues, increasing its potential risk.

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 US and world economies and markets, which may lead to increased market volatility and may have significant adverse effects on the fund and its investments.

Investing in securities that meet ESG criteria may result in foregoing otherwise attractive opportunities, which may result in underperformance when compared to products that do not consider ESG factors.

Environmental, social responsibility and corporate governance (ESG) related DWS strategies seek to provide investors with access to assets that meet responsible investment criteria without sacrificing investment returns. Although we strive to incorporate an ESG criterion, as one of many other criteria, in our investment process, DWS is a fiduciary and will act in the best interests of the client and investment account. Thus, our investment team is to not sacrifice performance for ESG investments unless specifically required by a client's investment guidelines. In addition, ESG activities and processes may vary by investment strategy, asset type and location.

Past performance is no guarantee of future results.

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 (including the recent pandemic spread of the novel coronavirus), war, terrorism, trade disputes and related geopolitical events.

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

NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY

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-090684_1(6/22) DBX005247 (6/23)

¹ Paris Aligned Benchmark (PAB) indices were first introduced in 2019 as tools to accompany the transition to a low carbon economy by the Technical Expert Group of the European Commission. They are a group of indices aiming to reallocate capital towards a low carbon and climate resilient global economy.
² The carbon intensity for each company included in the underlying index is defined as its greenhouse gas emissions as a percentage of the company’s enterprise value including cash.
³ The relevant reference is the Solactive GBS US Large & Mid Cap Index
⁴ Source: Solactive, as of June 22, 2022

* IIGCC (Institutional Investors Group on Climate Change): European initiative to mobilize capital to reduce carbon dioxide emissions. More than 170 members with more than 23 trillion euros of investment capital. Linked to Climate Action 100+.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220628005174/en/

Kenny Juarez

DWS

Phone: 1-212-454-9994

E-Mail: kenny.juarez@dws.com

Source: DWS Group

FAQ

What is the Xtrackers Net Zero Pathway Paris Aligned U.S. Equity ETF (USNZ)?

The Xtrackers Net Zero Pathway Paris Aligned U.S. Equity ETF (USNZ) is an exchange-traded fund launched by DWS that focuses on large and mid-cap U.S. stocks while aiming for a net-zero emissions economy, aligned with the Paris Climate Accords.

What are the key features of the USNZ ETF?

The USNZ ETF features a unique Paris Aligned Benchmark index, a 50% reduction in carbon intensity, and a low expense ratio of 0.10%.

How many stocks are included in the USNZ ETF?

The USNZ ETF consists of 386 large and mid-cap U.S. stocks.

How does the USNZ ETF support sustainable investments?

The USNZ ETF supports sustainable investments by following a transparent set of rules aimed at reducing carbon emissions, aligning with international climate goals.

What is the total value of DWS's ESG-focused ETF lineup?

DWS's ESG-focused ETF lineup has been expanded to a total value of $4.2 billion.