Xtrackers MSCI USA Swap UCITS ETF 1D

Issuer: Xtrackers

Asset Class: Equity

TER: 7bps

Trading Currency: GBP

Pays Income: False

Listing Date: 20 Mar 2023

Ticker: XUSW

ISIN: LU2581375073

This financial instrument provides a targeted and efficient way to invest in the U.S. equity market, offering exposure to a broad portfolio of large and mid-capitalization companies. By tracking a prominent U.S. equity benchmark, it captures the performance of approximately 85% of the free float-adjusted market capitalization in the United States. This makes it a comprehensive tool for participating in the growth of some of the world's most innovative and established corporations across key sectors such as technology, healthcare, and consumer services. The structure of the fund is designed for cost-efficiency, which is a critical factor for long-term investors looking to maximize their returns by minimizing frictional costs.

The product utilizes a synthetic replication methodology, meaning it enters into a swap agreement to gain the performance of the underlying index rather than holding the individual stocks directly. This can result in more precise tracking and potentially lower transaction costs compared to physical replication. While this introduces counterparty risk, it is managed within strict regulatory frameworks that require collateralization to protect investor assets. This investment serves as a core component for a globally diversified portfolio, providing foundational exposure to the world's largest economy. The distributing share class is designed to provide investors with a regular income stream from the dividends paid by the underlying companies, making it suitable for those with income-oriented investment objectives.