Xtrackers ESG USD High Yield Corporate Bond UCITS ETF 2C GBP Hedged GBP

Issuer: Xtrackers

Asset Class: Fixed Income

TER: 30bps

Trading Currency: GBP

Pays Income: False

Listing Date: 30 Jan 2023

Ticker: XZ2G

ISIN: IE000WHO5BF2

This actively managed fund offers exposure to the US dollar-denominated high-yield corporate bond market, specifically targeting investors who prioritize environmental, social, and governance (ESG) principles. The primary objective is to generate a total return through a combination of income from bond coupons and potential capital appreciation. By employing an active management approach, the portfolio manager has the flexibility to select securities and manage risk without being tied to a specific benchmark index. This allows for tactical adjustments based on market conditions, credit analysis, and opportunities within the high-yield universe, aiming to optimize the risk-return profile.

The core of the investment strategy is its robust sustainability framework. The fund integrates ESG criteria by applying specific exclusions and screens. It avoids investing in companies involved in controversial business areas such as weapons, tobacco, and thermal coal. Furthermore, the selection process favors issuers with strong ESG ratings, aiming to build a portfolio of companies that demonstrate superior management of sustainability-related risks and opportunities. This dual focus on financial returns and responsible investing makes the fund a suitable option for those looking to add a higher-yielding, ethically-screened component to their fixed-income allocation, while accepting the inherent credit and default risks associated with the sub-investment-grade bond market.