Xtrackers EMU Net Zero Pathway Paris Aligned UCITS ETF 1C

Issuer: Xtrackers

Asset Class: Equity

TER: 15bps

Trading Currency: GBP

Pays Income: False

Listing Date: 04 Mar 2022

Ticker: XNZE

ISIN: IE000Y6L6LE6

This fund offers investors targeted exposure to large and mid-capitalization companies within the European Monetary Union (EMU), while adhering to a strict climate-focused investment framework. It physically replicates the performance of an index designed to meet the stringent criteria of the EU's Paris-Aligned Benchmark (PAB) regulation. This means the underlying portfolio is constructed to exhibit a significant reduction in greenhouse gas (GHG) intensity compared to its parent market-cap weighted index and is aligned with a trajectory to achieve net-zero emissions by 2050. The methodology also incorporates specific exclusions for companies involved in controversial weapons, tobacco, and those with substantial revenues from fossil fuels like thermal coal, oil, and gas.

The investment is specifically tailored for environmentally conscious investors who wish to decarbonize their European equity holdings and align their capital with the long-term goals of the Paris Agreement. It provides a core allocation to developed European markets through a lens of climate transition. By selecting and weighting companies based on their carbon footprint, their readiness for a low-carbon economy, and their involvement in green technologies, the fund aims to mitigate climate-related financial risks. It seeks to capture potential upside from companies that are leaders in the global shift towards sustainability, offering a forward-looking approach to regional equity investing.

Within a diversified portfolio, this product can serve as a core strategic holding for Eurozone equity exposure, effectively replacing a traditional, non-ESG market tracker. The accumulating share class structure ensures that all dividends from the underlying securities are reinvested back into the fund, fostering potential for enhanced long-term compound growth. This systematic, rules-based strategy provides a transparent and efficient vehicle for investors to access companies within the Eurozone that are actively managing their climate impact and contributing to a more sustainable global economy.