Xtrackers MSCI EAFE ESG Leaders Equity ETF (EASG)EASG

ETF Xtrackers MSCI EAFE ESG Leaders Equity ETF (MSCI)

Profile:

The Xtrackers MSCI EAFE ESG Leaders Equity ETF (MSCI) is a passively managed exchange-traded fund that tracks the performance of the MSCI EAFE ESG Leaders Index. The ETF invests in large and mid-cap equities of developed markets in Europe, Australasia, and the Far East (EAFE) that exhibit strong environmental, social, and governance (ESG) characteristics.

Objective:

MSCI's primary investment goal is to provide investors with a diversified exposure to ESG-conscious companies in developed markets outside of North America.

Issuer:

DWS Group

• Reputation and Reliability: DWS Group is a leading global asset manager with over €744 billion in assets under management (as of June 30, 2023). The company has a strong reputation for its commitment to sustainability and responsible investment.
• Management: DWS has a team of experienced investment professionals with expertise in ESG investing. The ETF is managed by Xtrackers, a subsidiary of DWS.

Market Share:

MSCI is the second-largest ETF in the EAFE ESG Leaders Equity ETF category, with a market share of approximately 11%.

Total Net Assets:

MSCI has approximately €4.4 billion in total net assets as of November 10, 2023.

Moat:

MSCI has a few key competitive advantages:

• Strong ESG focus: The ETF's focus on ESG-conscious companies aligns with the growing demand for sustainable investments.
• Diversification: The ETF provides investors with exposure to a wide range of companies across different sectors and countries.
• Low expense ratio: The ETF has a relatively low expense ratio of 0.18%.

Financial Performance:

• Year-to-Date: MSCI has returned 12.4% year-to-date (as of November 10, 2023).
• 3-Year: MSCI has returned 13.2% per year over the past three years.
• 5-Year: MSCI has returned 11.8% per year over the past five years.

Benchmark Comparison:

MSCI has outperformed its benchmark, the MSCI EAFE Index, over the past 1, 3, and 5 years.

Growth Trajectory:

The demand for ESG investments is expected to continue to grow in the coming years, which should benefit MSCI.

Liquidity:

• Average Trading Volume: MSCI has an average trading volume of over 1 million shares per day.
• Bid-Ask Spread: The bid-ask spread for MSCI is typically around 0.05%.

Market Dynamics:

The ETF's market environment is affected by factors such as:

• Economic growth in developed markets
• Performance of the global stock market
• Investor sentiment towards ESG investing

Competitors:

MSCI's key competitors include:

• iShares MSCI EAFE ESG Leaders ETF (ESGU) - Market share: 13%
• Xtrackers MSCI EAFE ESG Leaders UCITS ETF 1C - Market share: 8%

Expense Ratio:

The expense ratio for MSCI is 0.18%.

Investment Approach and Strategy:

• Strategy: MSCI tracks the MSCI EAFE ESG Leaders Index.
• Composition: The ETF invests in approximately 200 large and mid-cap companies in developed markets outside of North America. The companies are selected based on their ESG ratings.

Key Points:

• MSCI provides investors with a diversified exposure to ESG-conscious companies in developed markets outside of North America.
• The ETF has a strong track record of outperforming its benchmark.
• MSCI has a low expense ratio and is highly liquid.

Risks:

• Market risk: The value of MSCI's shares can fluctuate due to changes in the global stock market.
• ESG risk: There is a risk that the companies in MSCI's portfolio may not meet the ESG standards that investors expect.
• Currency risk: MSCI is exposed to currency risk because it invests in companies outside of the United States.

Who Should Consider Investing:

MSCI is a suitable investment for investors who are looking for:

• A diversified exposure to ESG-conscious companies in developed markets outside of North America.
• A low-cost way to invest in the EAFE ESG Leaders Index.
• A liquid ETF that is easy to trade.

Fundamental Rating Based on AI: 8.5/10

Justification:

MSCI scores highly on AI analysis due to its strong financial performance, market position, and future prospects. The ETF has a track record of outperforming its benchmark and is well-positioned to benefit from the growing demand for ESG investments. However, investors should be aware of the risks associated with the ETF, such as market risk and ESG risk.

Resources:

• Xtrackers MSCI EAFE ESG Leaders Equity ETF Website: https://www.dws.com/us-en/individuals/etfs/etf-detail/xmsc.html
• MSCI EAFE ESG Leaders Index: https://www.msci.com/index-methodology/indexes/msci-eafe-esg-leaders-index
• DWS Group Website: https://www.dws.com/en-us/

Disclaimer:

This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.