Xtrackers USA High Dividend Yield ESG UCITS ETF 1D

Issuer: Xtrackers

Asset Class: Equity

TER: 25bps

Trading Currency: USD

Pays Income: False

Listing Date: 20 Oct 2023

Ticker: XZDU

ISIN: IE000V04SL39

This instrument provides targeted exposure to a portfolio of high dividend-yielding U.S. companies that also exhibit strong Environmental, Social, and Governance (ESG) credentials. It is engineered to replicate the performance of the MSCI USA High Dividend Yield ESG Low Carbon Target Select Index. The strategy is tailored for investors aiming to secure regular income from U.S. equities while aligning their capital with sustainability goals. By concentrating on companies that not only offer compelling dividend yields but also meet specific ESG and low-carbon standards, the portfolio pursues a dual objective of income generation and responsible investing.

The underlying index employs a systematic, multi-stage screening methodology, starting with a broad universe of U.S. large and mid-capitalization stocks. It initially identifies companies with a track record of high and sustainable dividend payments. Following this, a robust ESG filter is applied, which excludes firms with significant involvement in controversial sectors such as tobacco, contentious weapons, and thermal coal. The index also incorporates a low-carbon target, striving for a substantial reduction in carbon emissions intensity relative to the parent market index. This process culminates in a portfolio weighted towards more sustainable, income-producing enterprises within the American market, potentially offering enhanced resilience alongside its primary yield focus.

This product is well-suited for income-focused investors who want to integrate responsible investment principles into their core U.S. equity holdings. It can function as a strategic component for those seeking a potentially higher income stream than the broader market, while simultaneously mitigating risks associated with subpar ESG performance and significant carbon footprints. The physical replication approach ensures direct ownership of the underlying stocks, which enhances transparency. Ultimately, it delivers a streamlined, single-product solution for accessing a carefully curated portfolio of American dividend-paying companies screened for both financial strength and their dedication to sustainable operations.