XTrackers MSCI Canada UCITS ETF 1C

Issuer: Xtrackers

Asset Class: Equity

TER: 35bps

Trading Currency: USD

Pays Income: False

Listing Date: 10 May 2010

Ticker: XCAD

ISIN: LU0476289540

This investment product offers targeted exposure to the Canadian equity market, focusing on large and mid-cap companies. It is designed for investors looking to participate in the growth of Canada's economy, which is rich in natural resources and features a strong financial sector. The fund aims to replicate the performance of a specific Canadian stock market index. What sets this fund apart is its integration of Environmental, Social, and Governance (ESG) criteria. It systematically screens out companies involved in controversial business activities, such as controversial weapons, tobacco, and thermal coal, as well as those that violate certain global norms. This approach provides a portfolio that aligns with sustainability-minded investment principles while maintaining broad market exposure to Canadian equities.

Investing in this product provides a convenient and diversified way to access the Canadian market through a single transaction. The ESG screening process offers a potential benefit by mitigating risks associated with poor corporate governance, environmental liabilities, or social controversies, which could appeal to investors seeking both financial returns and a positive societal impact. The Canadian economy's stability, coupled with its exposure to both commodity cycles and developed market financial services, offers a unique diversification benefit for a global portfolio. The fund is structured as a UCITS-compliant vehicle, ensuring a high level of regulatory oversight and investor protection. As a physically replicated fund, it directly holds the underlying shares of the Canadian companies in its index, offering transparency in its holdings.

This fund can serve as a core holding for investors seeking long-term exposure to a developed, non-US North American market. It can also be used tactically to overweight Canada within a broader global equity allocation, perhaps based on a favorable outlook for key Canadian sectors like financials, energy, and materials. For investors prioritizing sustainable investing, it serves as a foundational building block for a Canadian equity allocation that reflects their values. The accumulating share class structure means that any dividends paid by the underlying companies are automatically reinvested back into the fund, which can enhance long-term compound growth without creating taxable income events for the investor, making it particularly suitable for long-term savings or retirement accounts.