DWS is expanding its range of dividend products with four new Xtrackers ETFs. The firm writes that the listed index funds enable investors to focus on high-dividend stocks in three regions – the US, Europe and the euro zone – as well as globally.
At the same time, DWS writes that they meet certain sustainability criteria of the index provider MSCI. Specifically, they track different variants of the MSCI High Dividend Yield Low Carbon SRI Screened Select index series. This was constructed with the help of an optimisation process in such a way that the often conflicting objectives such as dividend yield, mapping of market development and consideration of ESG criteria can be effectively reconciled. The four new Xtrackers MSCI High Dividend Yield ESG UCITS ETFs are listed on Deutsche Börse, and the ETFs covering the US and global equity markets, were additionally listed on the London Stock Exchange.
Among other things, the index construction significantly reduces the portfolio’s CO2 intensity and fossil commodity exposure compared to the initial portfolio. In addition, companies with controversial activities and harmful business practices are excluded. At the same time, exposure to high-dividend stocks is maximized. There is also a focus on giving greater consideration to quality companies that can provide more stable performance over the long term. Overall, the strategy is designed to avoid significant cluster risks in terms of sectors, factors, regions or individual stocks.
The objective of the new Xtrackers ETFs is to achieve a performance that is close to the broad market indices (e.g. MSCI World) over the long term. At the same time, the aim is to achieve a dividend yield that is generally comparable to that of traditional dividend indices. “Xtrackers’ new ETF range combines dividend-oriented with sustainable investing, while also tracking the performance of broad equity markets. For this combination of important investment objectives, we expect high demand from both retail and institutional investors,” says Simon Klein, Global Head of Xtrackers Sales at DWS. The ETFs offer quarterly income distributions and, with an annual management fee of 0.25 percent each, are among the most cost-effective offerings in this space.
