Xtrackers MSCI World Quality ESG UCITS ETF 1C

Issuer: Xtrackers

Asset Class: Equity

TER: 25bps

Trading Currency: USD

Pays Income: False

Listing Date: 18 Jul 2023

Ticker: XWEQ

ISIN: IE0003NQ0IY5

This investment vehicle offers exposure to a curated portfolio of global companies from developed markets, selected based on a dual-focus strategy of high quality and strong environmental, social, and governance (ESG) credentials. The underlying index methodology targets companies that exhibit robust financial health, typically characterized by high return on equity, stable year-over-year earnings growth, and low financial leverage. This "quality" factor screen is designed to identify resilient businesses with sustainable competitive advantages, which may offer better risk-adjusted returns over the long term, particularly during periods of market uncertainty. By focusing on these fundamentally sound companies, the strategy aims to provide a solid core for a global equity allocation.

In addition to the quality screen, the fund integrates a comprehensive ESG framework. It applies a set of exclusionary screens to avoid companies involved in controversial business activities, such as controversial weapons, tobacco, and thermal coal. Furthermore, the index construction aims to significantly reduce the portfolio's carbon footprint compared to the standard parent benchmark. This approach caters to investors who wish to align their portfolios with sustainability goals and mitigate risks associated with poor ESG practices and climate transition. The combination of quality fundamentals with responsible investing principles seeks to capture long-term growth from well-managed, forward-looking companies poised to thrive in a more sustainable global economy. The accumulating share class structure ensures that any dividends are automatically reinvested, facilitating compound growth over time.