Xtrackers MSCI World Climate Transition UCITS ETF 1C USD EUR

Issuer: Xtrackers

Asset Class: Equity

TER: 19bps

Trading Currency: USD

Pays Income: False

Listing Date: 09 Mar 2023

Ticker: XCTU

ISIN: IE000P4AYI47

This investment vehicle offers exposure to a portfolio of global developed market companies positioned to benefit from the transition to a low-carbon economy. The strategy is designed to meet the minimum standards of the EU Climate Transition Benchmark (CTB) regulations, which means it follows a defined decarbonization trajectory. The fund aims to provide returns that correspond to the performance of an index comprising large and mid-capitalization companies that demonstrate a commitment to reducing carbon emissions and mitigating climate-related risks. The selection process favors businesses with credible science-based targets and those generating green revenues, while underweighting or excluding firms with high carbon intensity and fossil fuel exposure.

The underlying index employs a rules-based methodology that starts with a broad parent universe of global stocks and applies a series of screens and re-weighting adjustments. Companies involved in controversial weapons, tobacco, and other contentious sectors are excluded. The remaining constituents are then optimized to achieve a significant reduction in greenhouse gas intensity compared to the parent index and to ensure the portfolio is on a year-on-year self-decarbonization pathway. This forward-looking approach ensures the portfolio is aligned with the long-term goals of the Paris Agreement and a 1.5°C warming scenario.

For investors, this fund serves as a core equity holding that integrates climate considerations directly into the investment process. It provides diversified access to the global stock market while systematically tilting the portfolio towards firms that are leaders in climate action. By doing so, it seeks not only to contribute to positive environmental outcomes but also to mitigate transition risks, such as regulatory changes and shifting consumer preferences, that could impact companies unprepared for a net-zero future. This makes it a suitable option for those looking to build climate-resilient portfolios and capture potential growth opportunities arising from the global energy transition.