New ETF scores companies on new and potential carbon emissions

Deutsche Bank has bolstered its “responsible” investment offerings through its asset management arm, DWS. The money manager will provide exposure to emerging markets with an ETF tied to environmental, social and governance (ESG) factors.

The new fund is called the Xtrackers ESG MSCI Emerging Markets UCITS ETF. The company will list the fund on the London Stock Exchange under the ticker XZEM.

The ETF carries an annual fee of 0.25%.

The Deutsche Bank ETF Strategy

The XZEM will track the MSCI Emerging Market ESG Leaders Low Carbon Ex Tobacco Involvement index. The fund will score and select holdings based on ESG standards and based on existing or potential carbon emissions of companies.

In addition to low-carbon firms, the fund will exclude firms in the industries of nuclear power, controversial weapons, or tobacco production. The fund will also avoid firms with significant exposure to alcohol or gambling revenues.

“The expansion of our ESG Xtrackers range to cover emerging market equities will provide investors with an efficient new tool for taking exposure to this important area of the market,” said Manooj Mistry, head of index investing at DWS.

This is the sixth ESG ETF from Xtracker.

The group has several other ESG products that provide exposure to the global economy, Japan, USA, and European markets. It also operates a euro corporate bond ETF.

[Related: Purpose Investments Goes All In on ESG Principles]