Asset manager DWS’ exchange-traded funds business Xtrackers achieved the largest ever ETF launch in the U.S. with the listing of a new climate-focused ETF backed by a $2 billion investment by Finland-based pension insurance company Ilmarinen.
DWS Americas CEO Dirk Goergen said:
“DWS is pleased to partner with Ilmarinen to establish this new Xtrackers fund in the U.S. to help drive the transition to a low carbon economy. As we shared at our Capital Markets Day, we are focused on providing investors bespoke index investment solutions across asset classes and expanding the Xtrackers brand in the Americas with specialized products with attractive long term return opportunity.”
The new fund, Xtrackers MSCI USA Climate Action Equity ETF (NYSE: USCA), aims to provide investors with exposure to U.S. large and mid-cap companies leading in their sectors on climate transition action.
The index tracks the MSCI USA Climate Action Index, which employs a series of ESG screens to its parent index, the MSCI USA Index, including ineligibility for securities with very high emissions intensity and do not have Science Based Targets initiative-approved emissions reduction targets, as well as securities in the lowest quartile of their GICS sector based on their Climate Risk Management Score. Securities are then ranked for inclusion based on factors including emission intensity, green business revenue, Climate Risk Management Score and emission track record. The index selects 50% of the companies from each GICS sector of the parent index based on this assessment.
Arne Noack, Head of Systematic Investment Solutions, Americas at DWS, said:
“U.S. investors considering how to lower their carbon emissions over the long term are looking for best-in-class, forward looking strategies that align with their objectives. The launch of USCA is an example of our ability to launch products that meet the needs of our clients in a timely manner, while further extending our lineup of ETFs to invest in today’s markets.”