DWS writes that it has launched the Xtrackers Developed Green Real Estate ESG UCITS ETF that tracks the Dow Jones Developed Green Real Estate Index, which measures the performance of publicly traded real estate securities from industrialised countries globally that meet certain sustainability criteria and are weighted to be compatible with specific ESG-related constraints.
In October, DWS launched the Xtrackers Global Infrastructure ESG UCITS ETF.
The firm writes that on the one hand, the long-term trend of cities’ growth is expected to lead to increasing demand for property.
“In addition, there are structural developments such as the increasing demand for data centres and care facilities, for example. Energy-efficient, sustainably constructed buildings may also offer advantages for both property owners and users. Shares of real estate companies can be of interest to investors, as relevant indices have outperformed various broad equity indices over the long term. At the same time, their correlation with the broad equity market and other asset classes has been relatively low in the past. The reason for this is that real estate companies are only represented with low weightings in broad equity market indices. Listed property companies can offer a similar long-term return profile to a direct investment in an appropriately diversified property portfolio, but with the liquidity of equities.”
The Xtrackers Developed Green Real Estate ESG UCITS ETF has been listed on the London Stock Exchange and on Deutsche Börse (Xetra). The companies in the underlying Dow Jones Developed Green Real Estate Index are weighted using the GRESB Scores, the most widely used ESG scoring standard in Europe, The TER of the Xtrackers Developed Green Real Estate ESG UCITS ETF is 0.18 per cent.
‘The demand for green buildings with appropriate certification is generally high among tenants and investors,’ explains Michael Mohr, Global Head of Xtrackers Products at DWS. ‘With the ETF, we are offering investors broad access to property companies that are simultaneously receiving a tailwind from the downward trend in interest rates, taking into account sustainability criteria and with an increased focus on green building certification.’
‘We are very pleased to continue working with DWS, offering an index solution to meet both their investment and sustainability goals’ says Jas Duhra, Global Head of Sustainability Indices at S&P Dow Jones Indices (S&P DJI). The index can serve as a benchmark to monitor not just Real Estate performance but also ESG improvements of the Real Estate sector as companies in the sector seek to align with developing global sustainable initiatives, the firm writes.
