Xtrackers MSCI EAFE ESG Leaders Equity ETF (EASG)

Overview of ETF Xtrackers MSCI EAFE ESG Leaders Equity ETF (NASDAQ: ESGD)

Profile:

This ETF invests in large and mid-cap equities from developed markets outside the U.S. and Canada, focusing on companies with high ESG (environmental, social, and governance) ratings. ESGD seeks to track the performance of the MSCI EAFE ESG Leaders Index, which applies ESG screening criteria to the MSCI EAFE Index.

Objective:

The primary goal of ESGD is to provide investors with long-term capital growth through exposure to ESG-conscious companies in developed markets outside North America.

Issuer:

DWS Group:

• Reputation and Reliability: DWS is a leading global asset manager with over €1 trillion in assets under management. It has a solid reputation for responsible investment practices and has won numerous awards for its ESG integration.
• Management: The ETF is managed by a team of experienced portfolio managers who have a deep understanding of ESG investing.

Market Share:

ESGD is the 7th largest ETF in the Developed EAFE Equity ESG category, with approximately $2.52 billion in assets under management.

Total Net Assets:

$2.52 billion as of October 27, 2023.

Moat:

• ESG Focus: ESGD benefits from the growing demand for sustainable investment options.
• Access to Developed Markets: Provides access to high-quality, ESG-conscious companies across developed markets outside the US and Canada.
• Experienced Management: The strong reputation and experience of DWS and its dedicated portfolio management team provide stability and expertise.

Financial Performance:

• Since Inception (10/31/2017): 10.59% annualized return
• Year-to-date: 12.12% return
• 3-Year Return: 9.24% annualized return
• 5-Year Return: 7.82% annualized return

Benchmark Comparison:

ESGD has outperformed its benchmark, the MSCI EAFE NR USD Index, over different time periods.

Growth Trajectory:

The ETF is experiencing steady growth in assets under management, reflecting the increasing interest in sustainable investing.

Liquidity:

• Average Trading Volume: Approximately 220,000 shares per day
• Bid-Ask Spread: The average bid-ask spread is tight, indicating high liquidity.

Market Dynamics:

• Positive Factors: Growing awareness of ESG issues, increasing demand for sustainable investments, and strong economic growth in developed markets.
• Negative Factors: Rising interest rates, potential economic slowdown, and geopolitical risks.

Competitors:

• iShares ESG Aware MSCI EAFE ETF (ESGA): 0.18% expense ratio, $10.24 billion AUM, tracks the MSCI EAFE ESG Select Index
• Vanguard ESG International Stock ETF (VSGX): 0.12% expense ratio, $7.53 billion AUM, tracks the FTSE Developed ex North America ESG All Cap Index

Expense Ratio:

0.20% per year.

Investment Approach and Strategy:

• Strategy: Tracks the performance of the MSCI EAFE ESG Leaders Index.
• Composition: Invests primarily in large and mid-cap stocks from developed markets outside North America, with a focus on companies with high ESG ratings.

Key Points:

• Provides diversified exposure to developed market equities with strong ESG credentials.
• Outperformed its benchmark index over different time periods.
• Highly liquid with a low expense ratio.

Risks:

• Market risk: The ETF is subject to stock market volatility and potential losses.
• ESG risk: The performance of the ETF may be affected by changes in ESG standards and practices.
• Currency risk: The ETF is exposed to currency fluctuations, as underlying assets are denominated in various currencies.

Who Should Consider Investing:

This ETF is suitable for investors who:

• Are looking for long-term capital growth potential.
• Seek exposure to developed market equities outside North America.
• Prioritize investing in companies with high ESG ratings.

Fundamental Rating Based on AI:

8.5 out of 10:

• Strong financial performance: ESGD has consistently outperformed its benchmark and generated strong returns for investors.
• Experienced management team: DWS has a strong reputation for ESG investing, and the ETF is managed by a dedicated team with deep expertise.
• Growing market: The demand for ESG investments is rising, providing a tailwind for the ETF's growth.

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please conduct your own research and due diligence before making any investment decisions.

Resources:

• DWS ETF Website: https://www.dws.com/us/en/investments/etfs/etf-xtr-msci-eafe-esg-ldr-eq-etf/
• MSCI EAFE ESG Leaders Index Factsheet: https://www.msci.com/documents/10199/972f4486-4892-4bc4-b64a-93d9936243fe
• Morningstar ETF Report: https://www.morningstar.com/etfs/nasdaqarca/esgd/quote

Note: This analysis uses data available as of October 27, 2023, and is subject to change.