Transforming Investment with New ESG Standards
Xtrackers, a notable player in the investment world, has taken significant steps to align its exchange-traded funds (ETFs) with contemporary environmental, social, and governance (ESG) standards. In a positive move that reflects an evolving market, Xtrackers has announced changes to the reference indices for three of its leading ETFs, set to take effect soon.
Details of the ETF Updates
The change impacts key funds, including the Xtrackers MSCI AC Asia ex Japan ESG Swap UCITS ETF, the Xtrackers MSCI EM Latin America ESG Swap UCITS ETF, and the Xtrackers MSCI EM Europe, Middle East & Africa ESG Swap UCITS ETF. Under these changes, the indices will adopt new names and refine exclusion criteria to better reflect ESG principles. Particularly, the indices will transition to using the phrase "Low Carbon SRI Selection Capped Index," replacing the earlier terminology.
Enhanced Exclusion Criteria
As part of this updating process, MSCI Limited, the Index Administrator, is introducing enhanced exclusion criteria that will now factor into the index methodology. This includes a stringent screen against oil and gas sectors, as well as an increased scrutiny on power generation sources. Current ESG exclusion rules originating from the MSCI SRI Indexes methodology will be expanded to include industries that engage in non-sustainable practices, such as alcohol, tobacco, gambling, and others that do not align with responsible investing principles.
Commitment to Sustainable Investing
Xtrackers is committed to ensuring that their shareholders can make informed investment decisions. Despite the implementation of these updated index measures, the fundamental investment objectives, risk assessments, and fees associated with each Sub-Fund will remain unchanged. To ensure clarity and understanding of these adjustments, shareholders are encouraged to seek independent financial advice if necessary.
Availability of Revised Information
A revised Prospectus that outlines these changes will soon be made available on the Xtrackers website. This update is crucial for both existing and potential investors. Copies will also be accessible at the registered office of the company or through various foreign representatives, especially when shareholders seek more information.
Acknowledgment of Market Trends
Xtrackers’ recent enhancements come at a pivotal time as the global market places increasing importance on sustainability and ESG compliance. The products mentioned will not be subject to local sustainable investment labeling requirements, but investors can take comfort in knowing that Xtrackers is actively improving its commitment to sustainable investing.
Frequently Asked Questions
What changes are being made to the Xtrackers ETFs?
Xtrackers is updating the reference indices for three of its ETFs, introducing new ESG criteria and renaming the indices for better alignment with sustainable practices.
When will the changes take effect?
The updates to the indices will come into effect soon, enhancing their focus on ESG factors.
What is included in the new exclusion criteria?
The new criteria include exclusions for sectors like oil and gas, as well as industries involved in alcohol, tobacco, gambling, and more.
Will investment objectives change with these updates?
No, the investment objectives, risk profiles, and fees of the Sub-Funds will remain unchanged despite the index methodology updates.
How can shareholders access the revised Prospectus?
The revised Prospectus will be available on the Xtrackers website and can also be obtained at the registered office of the company or through authorized foreign representatives.
