Alternative Investments/ESG: DWS Launches An ESG Eurozone Sovereign Bonds ETF
The new ETF from DWS has been listed on Deutsche Börse Xetra in euros.
DWS has launched the Xtrackers II ESG Eurozone Government Bond UCITS ETF (XZEB GY). The ETF targets investments in the sovereign debt issued by countries in the eurozone.
The ETF tracks the FTSE ESG Select EMU Government Bond Index which covers fixed-rate, investment-grade sovereign bonds that are denominated in euros and issued by countries belonging to the common currency. Only bonds that have a minimum issue size of €2.5 billion and have a year to go before their maturity date are included in this index.
On the ESG front, the ETF’s investing strategy is based on a comprehensive country ESG assessment and weighting framework developed by FTSE Russell.
Each country in the index is assigned an overall ESG score based on an in-depth assessment drawing upon several indicators across the three core ESG pillars. These include:
- Environment: The countries are assessed on energy, climate, and resource management
- Social: The countries are assessed on inequality, employment, human capital, health, and societal wellbeing
- Governance: The countries are assessed on corruption, government effectiveness, political stability, regulatory quality, rule of law, and voice and accountability.
The ETF comes with an expense ratio of 0.15% and is classified as an Article 8 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
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