DWS has expanded its suite of socially responsible ETFs in Europe with a new fund targeting Chinese A-share equities while excluding companies from industries considered less reputable as well as firms with poor ESG profiles.
The fund provides socially responsible exposure to Chinese A shares.
The Xtrackers MSCI China A ESG Screened Swap UCITS ETF has been listed on London Stock Exchange in pound sterling (XCN LN) and on Deutsche Börse Xetra in euros (XCNA GY).
The fund uses synthetic (or swap-based) replication to track the MSCI China A Inclusion Select ESG Screened Index which is based on the parent MSCI China A Inclusion Index universe.
The parent universe covers Chinese A shares (renminbi-denominated shares traded on the Shanghai and Shenzhen stock exchanges) that are being progressively included within the flagship MSCI Emerging Markets Index over time. It currently consists of 497 large and mid-cap companies.
The ‘ESG Screened’ methodology harnesses the capabilities of MSCI’s ESG research division to exclude companies associated with weapons or tobacco, firms that derive significant revenue from thermal coal or oil sands extraction, and violators of UN Global Compact principles.
The remaining constituents are assigned ESG ratings that reflect how well each company manages key ESG issues relative to industry peers. Firms with the lowest rating of “CCC” are also removed.
The index weights its constituents by float-adjusted market capitalization while aiming to maintain a risk profile similar to the MSCI China A Inclusion Index by limiting deviations in sector weights relative to this universe.
The ETF comes with an expense ratio of 0.29%.
DWS offers a further seven ETFs within its ESG Screened suite targeting global, global developed, US, European, eurozone, Japanese, and emerging market equities.