Xtrackers MSCI Emerging Markets ESG UCITS ETF 1C

Issuer: Xtrackers

Asset Class: Equity

TER: 25bps

Trading Currency: GBP

Pays Income: False

Listing Date: 15 Jun 2020

Ticker: XESE

ISIN: IE00BG370F43

This fund offers investors a way to tap into the growth potential of developing economies while adhering to sustainable principles. The strategy provides exposure to a diversified portfolio of large and mid-capitalization stocks across various emerging market countries. Crucially, it employs a robust Environmental, Social, and Governance (ESG) screening process. This methodology selects companies that demonstrate strong ESG performance relative to their industry peers and explicitly excludes businesses involved in controversial sectors such as tobacco, controversial weapons, and thermal coal. The goal is to capture the dynamic growth of emerging markets through a lens of corporate responsibility, appealing to investors who prioritize both financial returns and ethical considerations.

By integrating ESG criteria, the investment aims to mitigate some of the inherent risks often associated with emerging markets, such as poor corporate governance or environmental oversight. Companies with higher ESG ratings may be better equipped to manage long-term risks and opportunities, potentially leading to more resilient performance over time. This approach seeks to provide the upside of emerging market growth, which is often fueled by favorable demographics and rapid industrialization, without compromising on sustainability standards. The fund follows a physical replication model, meaning it directly owns the underlying shares of the companies in the index, providing transparency and direct exposure.

This product is well-suited for individuals seeking a core holding for their emerging market equity allocation with a clear commitment to responsible investing. It allows for broad diversification across numerous developing countries and sectors, serving as a foundational block for a globally diversified portfolio. For those looking to align their capital with companies that are leaders in sustainability, this fund offers a convenient and efficient solution to participate in the long-term economic expansion of the world's fastest-growing regions.