Xtrackers ESG Global Government Bond UCITS ETF 2D GBP Hedged
| Issuer: Xtrackers |
| Asset Class: Fixed Income |
| TER: 25bps |
| Trading Currency: GBP |
| Pays Income: False |
| Listing Date: 15 Dec 2021 |
| Ticker: XZWS |
| ISIN: LU2385068247 |
This fund provides exposure to a diversified portfolio of global government bonds from developed countries. It specifically targets fixed-rate, local currency sovereign debt. The core strategy is to replicate the performance of a recognized global government bond index, ensuring broad market representation across various geographies and maturities. This offers a foundational building block for a fixed-income allocation, providing the relative stability and income potential associated with high-quality government securities from nations across North America, Europe, and Asia-Pacific.
A key differentiator for this investment is its integration of Environmental, Social, and Governance (ESG) criteria. The fund's underlying index excludes countries based on their ESG performance, using metrics from established providers. The methodology then involves tilting the portfolio towards countries with stronger ESG profiles and underweighting those with weaker scores. This approach allows investors to align their fixed-income holdings with sustainability principles without sacrificing the core characteristics of a global government bond portfolio. It aims to deliver returns comparable to the broad market while potentially mitigating long-term risks associated with poor governance or negative environmental and social impacts.
This product is designed for investors seeking stable income and portfolio diversification through exposure to developed market government bonds, but who also wish to incorporate a layer of responsible investing. It is suitable for those looking for a core holding in the fixed-income sleeve of their portfolio that adheres to ESG principles. By investing in sovereign debt from countries with better sustainability practices, investors can pursue the traditional benefits of government bonds, such as capital preservation and income, with an added focus on long-term sustainability factors. The annual distribution policy makes it an option for those seeking periodic cash flow from their investments.
