Asset manager DWS announced today that its exchange traded funds business Xtrackers has launched Xtrackers S&P MidCap 400 ESG ETF (NYSE: MIDE) and Xtrackers S&P SmallCap 600 ESG ETF (NYSE: SMLE), two new funds providing exposure for investors to the new midcap and smallcap ESG indices recently unveiled by index provider S&P Dow Jones Indices (S&P DJI).
Arne Noack, DWS’s Head of Systematic Investment Solutions, Americas, said:
“At DWS, we have made ESG-centric investing integral to our value proposition for our clients and the launch of MIDE and SMLE is a logical follow-on. We seek to provide investors with transparency around relevant ESG-metrics of a potential investment. Investors can, for example, easily view the reduction in carbon footprint of the underlying companies, compared to a non-ESG benchmark. This level of transparency is important for investors and intermediaries seeking credible ESG alternatives to mainstream equity indices.”
S&P DJI announced the launch of the new S&P MidCap 400 ESG and the S&P SmallCap 600 ESG indices earlier this month, expanding its range of ESG indices from its headline largecap S&P 500 ESG index to its smallcap and midcap counterparts. The new indices are designed to closely replicate the risk and return profile of their underlying benchmarks, the S&P MidCap 400 and the S&P SmallCap 600, while providing a significant boost in ESG score performance, using methodologies consistent with other S&P DJI ESG indices.
The new DWS ETFs are the first released in the U.S. that track the new indices, complementing the Xtrackers S&P 500 ESG ETF.
Mona Naqvi, Senior Director, Head of ESG Product Strategy, North America, S&P Dow Jones Indices, said:
“We’re very pleased to collaborate with DWS as it launches these new ESG ETFs in the U.S. By representing the U.S. mid- and small-cap equities market with improved sustainability profiles, the S&P MidCap 400 ESG and S&P SmallCap 600 ESG indices signify a new sustainable frontier in a space left largely untouched by sustainable indexing to date. As the first of their kind, these indices are poised to help raise reporting and sustainability standards among medium and small-sized companies as they seek to join the ranks of ESG indices. As such, ESG investing is no longer just a large-cap solution, it is now an all-cap solution.”
Amanda Rebello, DWS Head of Passive Sales, U.S. onshore, said:
“We are pleased to be the first in the industry to launch ETFs for the S&P MidCap and SmallCap ESG indices. With their competitive net expense ratios, the ETFs can be used as core portfolio building blocks.”