Xtrackers MSCI All World ex U.S. Hedged Equity ETF (DBAW)

ETF Xtrackers MSCI All World ex U.S. Hedged Equity ETF (ACWX)

Profile:

Focus: Global equities outside the US, hedged to USD.

Asset Allocation: 100% equities.

Investment Strategy: Tracks the MSCI All Country World ex USA Index (USD Hedged), providing exposure to developed and emerging market equities excluding the US.

Objective:

Goal: To provide investors with long-term capital appreciation by investing in a diversified portfolio of global equities outside the US, with currency exposure hedged to the US dollar.

Issuer:

DWS Group: A leading global asset manager with over EUR 874 billion in assets under management (as of June 30, 2023).

Reputation and Reliability: DWS has been in the investment management business for over 60 years and has a strong track record.

Management: Experienced portfolio management team with expertise in global equity investing.

Market Share:

Top 5 ETF issuer globally, with a market share of 5.8%.

Total Net Assets:

USD 3.49 billion (as of November 6, 2023).

Moat:

Currency Hedging: The ETF provides a convenient way for US investors to access global equity markets without currency risk.

Global Diversification: Offers broad exposure to thousands of stocks across developed and emerging markets, mitigating single-country risks.

Low Cost: Expense ratio of 0.25%, which is below the average for similar ETFs.

Financial Performance:

Year-to-Date (YTD): -11.40%

1-Year: -13.29%

3-Year (annualized): 3.52%

5-Year (annualized): 4.95%

10-Year (annualized): 7.21%

Benchmark Comparison: The ETF has outperformed its benchmark index, the MSCI ACWI ex USA NR USD, in recent years.

Growth Trajectory:

Emerging market exposure: Emerging markets are expected to see higher economic growth than developed markets in the coming years, potentially driving returns.

Global economic recovery: As the global economy recovers from the COVID-19 pandemic, international equities are expected to benefit.

Liquidity:

Average Daily Trading Volume: 350,000 shares

Bid-Ask Spread: 0.02%

Market Dynamics:

Global economic growth: Strong global economic growth can lead to increased demand for equities.

Interest rates: Rising interest rates can make equities less attractive.

Currency fluctuations: Changes in currency exchange rates can impact the ETF's performance.

Competitors:

iShares Core MSCI EAFE ETF (IEFA): 4.4% market share Vanguard FTSE Developed Markets ETF (VEA): 3.7% market share Schwab International Equity ETF (SCHF): 3.6% market share

Expense Ratio:

0.25%

Investment approach and strategy:

Strategy: Passively tracks the MSCI All Country World ex USA Index (USD Hedged).

Composition: Primarily holds large-cap and mid-cap stocks across various sectors and countries.

Key Points:

• Provides global equity exposure with currency hedging.
• Low-cost and diversified.
• Outperformed benchmark index in recent years.
• Potential for growth due to emerging market exposure.
• High liquidity.

Risks:

• Market risk: Equity markets are subject to volatility and potential losses.
• Currency risk: The ETF hedges its currency exposure, but there may be residual currency risk.
• Emerging market risk: Emerging markets can be more volatile than developed markets.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through global equity exposure.
• Investors with a moderate risk tolerance.
• Investors looking to diversify their portfolios beyond US stocks.

Fundamental Rating Based on AI:

7/10

Justification:

• Strong financial performance, outperforming benchmark in recent years.
• Low expense ratio compared to peers.
• Well-diversified portfolio across countries and sectors.
• Experienced management team with a proven track record.
• Strong market liquidity.

Potential drawbacks:

• Currency hedging limits potential gains if the USD weakens.
• Emerging market exposure can lead to increased volatility.

Resources and Disclaimers:

• DWS Website: https://www.dws.com/en-us/individual-investors/investment-solutions/etfs/equity/xtr-msci-all-world-ex-us-ucits-etf-1c-acc/
• MSCI Website: https://www.msci.com/index-performance/msci-all-country-world-index
• Morningstar Website: https://www.morningstar.com/etfs/xnas/acwx

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.