Xtrackers S&P 500 ESG UCITS ETF 1C

Issuer: Xtrackers

Asset Class: Equity

TER: 8bps

Trading Currency: USD

Pays Income: False

Listing Date: 13 Dec 2022

Ticker: XZSP

ISIN: IE0007ULOZS8

This fund offers investors a way to gain core exposure to the U.S. large-cap equity market while incorporating significant environmental, social, and governance (ESG) principles. The strategy is designed for those who wish to align their investments with sustainability values without deviating substantially from the risk and return profile of the iconic S&P 500. By tracking a specialized ESG-screened version of the index, the portfolio provides access to a broad and diversified basket of leading American companies that demonstrate strong sustainability credentials. The selection process systematically excludes firms involved in controversial activities such as tobacco, thermal coal, and certain weapons manufacturing, as well as companies that fail to meet standards set by the UN Global Compact. This results in a refined portfolio focused on more responsible corporate citizens.

The underlying index also removes companies with the lowest ESG scores within their respective industries, further enhancing the portfolio's sustainability profile. This approach aims to capture the long-term performance of the U.S. market while potentially mitigating risks associated with poor environmental stewardship, social controversies, or weak corporate governance. The fund employs a physical replication methodology, meaning it directly owns the constituent stocks of the index, which provides a high degree of transparency for the end investor. As a cost-effective and liquid instrument, it serves as an excellent building block for a diversified portfolio, appealing to investors who prioritize both financial returns and positive societal impact. It represents a straightforward solution for integrating ESG considerations into a core U.S. equity allocation.