Xtrackers MSCI Japan Climate Transition UCITS ETF 1D

Issuer: Xtrackers

Asset Class: Equity

TER: 15bps

Trading Currency: GBP

Pays Income: False

Listing Date: 09 Mar 2023

Ticker: XCJD

ISIN: IE0006FDYJF8

This financial instrument offers investors a targeted way to participate in the growth of Japanese companies that are at the forefront of the transition to a low-carbon economy. The investment strategy is designed to mirror the performance of a specific climate-focused index, providing exposure to a portfolio of Japanese large and mid-capitalisation stocks. The selection process for the underlying securities is rigorous, ensuring they meet the criteria set out by the European Union's Climate Transition Benchmark (CTB) regulations. This means the portfolio is constructed to have a significantly lower carbon footprint compared to a traditional broad market Japan index and is aligned with a clear decarbonisation pathway.

By investing in this product, individuals can gain exposure to the Japanese market while simultaneously supporting companies that are actively managing their climate-related risks and opportunities. The portfolio is built to be compatible with the long-term global warming targets outlined in the Paris Agreement. It focuses on businesses that are not only reducing their operational emissions but are also innovating and providing solutions for a sustainable future. This makes it a suitable core holding for environmentally conscious investors seeking to combine financial returns with positive environmental impact, capturing the potential of Japan's corporate sector as it adapts to global climate objectives.

The underlying index employs a rules-based methodology that considers various climate-related metrics, including carbon emissions intensity and the company's commitment to decarbonisation. This results in a diversified portfolio that avoids companies with significant fossil fuel exposure while overweighting those with strong climate credentials. This forward-looking approach aims to mitigate long-term climate risks and capitalize on opportunities arising from the global shift towards renewable energy, energy efficiency, and other green technologies within the Japanese corporate landscape.