Xtrackers MSCI Japan ESG UCITS ETF 1C

Issuer: Xtrackers

Asset Class: Equity

TER: 20bps

Trading Currency: GBP

Pays Income: False

Listing Date: 15 Jun 2020

Ticker: XESJ

ISIN: IE00BG36TC12

This investment vehicle offers targeted exposure to the Japanese equity market through a responsible investing lens. The strategy is centered on tracking a benchmark composed of large and mid-capitalization Japanese companies that demonstrate superior environmental, social, and governance (ESG) performance relative to their sector peers. By focusing on these ESG leaders, the fund aims to provide access to businesses that are not only financially robust but are also effectively managing sustainability-related risks and opportunities, which can be crucial for long-term value creation.

The underlying index employs a rigorous screening methodology to construct its portfolio. It explicitly excludes companies with significant business involvement in controversial sectors such as tobacco. Furthermore, it incorporates a low-carbon tilt, overweighting companies with lower carbon emissions and underweighting those with higher emissions. To enhance diversification and mitigate concentration risk, the weight of any single constituent is capped at 5%. This multi-faceted approach ensures the portfolio is aligned with both ethical considerations and climate-conscious objectives, offering a refined way to invest in Japan's corporate landscape.

For investors seeking to integrate sustainability into their international equity allocation, this fund can serve as a core holding for Japanese market exposure. It provides a transparent and rules-based method for accessing companies that are at the forefront of sustainable practices within one of the world's largest developed economies. The strategy is designed for those who believe that strong ESG credentials and a proactive stance on climate change are indicative of well-managed, forward-looking companies poised for resilience in a shifting global economic environment.