Xtrackers MSCI Global SDG 12 Circular Economy UCITS ETF 1C

Issuer: Xtrackers

Asset Class: Equity

TER: 35bps

Trading Currency: GBP

Pays Income: False

Listing Date: 20 Jan 2023

Ticker: XD12

ISIN: IE000Y6ZXZ48

The global economy has long operated on a linear 'take-make-dispose' model, leading to significant resource depletion, waste generation, and environmental strain. The circular economy offers a transformative alternative, aiming to redefine growth by focusing on positive, society-wide benefits. This model is designed to be restorative and regenerative, decoupling economic activity from the consumption of finite resources. It revolves around principles of designing out waste and pollution, keeping products and materials in use for as long as possible, and regenerating natural systems. This approach is directly aligned with the United Nations' Sustainable Development Goal 12, which promotes responsible consumption and production patterns, making it a critical theme for a sustainable future.

This fund offers targeted exposure to companies at the forefront of this economic shift. It seeks to track an index composed of global firms that are expected to derive significant revenues from activities related to the circular economy. The portfolio includes businesses involved in areas such as recycling and waste management, sustainable packaging, resource-efficient design, and the development of sharing economy platforms or 'product-as-a-service' business models. By focusing on companies that are enabling the transition away from a linear system, the investment strategy captures a diverse range of industries and innovators that are key to building a more sustainable and resilient global economy.

For investors, this represents an opportunity to participate in a long-term structural growth trend driven by environmental necessity, regulatory shifts, and changing consumer preferences. Investing in the circular economy is not only a means to align a portfolio with crucial sustainability objectives but also to gain exposure to innovative companies developing solutions for tomorrow's challenges. These companies may possess a competitive advantage through enhanced resource efficiency, stronger supply chains, and improved brand reputation. The strategy provides a way to tap into the potential for both financial returns and positive environmental impact.