Xtrackers Emerging Markets Carbon Reduction and Climate Improvers ETF (EMCR)

ETF Overview: Xtrackers Emerging Markets Carbon Reduction and Climate Improvers ETF

Profile:

Xtrackers Emerging Markets Carbon Reduction and Climate Improvers ETF (NASDAQ: EMCR) is a passively managed ETF that tracks the S&P Emerging Markets Carbon Reduced Climate Improvers Index. This index focuses on companies in emerging markets that have a strong commitment to reducing carbon emissions and improving their environmental footprint. The ETF primarily invests in equities across various sectors, with a significant focus on technology, financials, and consumer discretionary.

Objective:

The primary investment goal of EMCR is to provide long-term capital growth by investing in companies that are actively addressing climate change. This aligns with the growing demand for sustainable and environmentally conscious investments.

Issuer:

DWS Group, the issuer of EMCR, is a global asset management firm with over $1 trillion in assets under management. DWS has a strong reputation in the market, known for its experience and expertise in managing various investment strategies.

Market Share:

EMCR currently holds a market share of approximately 0.1% within the emerging markets ESG ETF category. While not the largest in its sector, it demonstrates a growing demand for its specific focus on carbon reduction.

Total Net Assets:

EMCR has approximately $170 million in total net assets under management as of October 27, 2023.

Moat:

EMCR's competitive advantages include:

• Unique Focus: The ETF targets a specific and growing niche within the broader ESG market, focusing on carbon reduction and climate improvement in emerging markets.
• Experienced Management: DWS Group's expertise in managing similar index-tracking ETFs provides confidence in the ETF's execution.
• Passive Management: The ETF's passive approach offers a cost-efficient way to access this specific market segment.

Financial Performance:

EMCR has experienced strong performance since its inception in 2020. The ETF has outperformed its benchmark index, the S&P Emerging BMI, over various timeframes.

Growth Trajectory:

The increasing awareness and demand for sustainable investments suggest a positive growth trajectory for EMCR. The emerging markets are expected to play a significant role in the global fight against climate change, further fueling interest in this specific ETF.

Liquidity:

EMCR has a moderate average trading volume, indicating sufficient liquidity for most investors. The bid-ask spread is competitive, offering relatively low transaction costs.

Market Dynamics:

Several factors influence the ETF's market environment:

• Economic Indicators: Global economic growth and stability impact emerging market performance.
• ESG Regulations: Government policies and regulations promoting sustainability can positively impact the ETF.
• Technological Advancements: Innovations in climate-friendly technologies can drive growth in the targeted companies.

Competitors:

Key competitors include:

• iShares ESG Aware Emerging Markets MSCI ETF (ESGE) with a market share of 0.25%
• SPDR MSCI Emerging Markets ESG Leaders ETF (ESGL) with a market share of 0.20%

Expense Ratio:

EMCR has an expense ratio of 0.35%, which is considered competitive within its category.

Investment Approach and Strategy:

EMCR passively tracks the S&P Emerging Markets Carbon Reduced Climate Improvers Index, investing in companies with high environmental and climate performance scores. The ETF holds a diversified portfolio of equities across various emerging markets.

Key Points:

• Focuses on carbon reduction and climate improvement in emerging markets.
• Strong track record of performance.
• Experienced management from DWS Group.
• Passive and cost-efficient investment approach.
• Potential for growth due to increasing demand for sustainable investments.

Risks:

• Volatility: The ETF's performance can be more volatile than broader market indices.
• Market Risk: The ETF is exposed to the risks associated with emerging markets and specific sectors.
• Regulatory Risk: Changes in ESG regulations and policies can impact the ETF's performance.

Who Should Consider Investing:

EMCR is suitable for investors:

• Seeking long-term capital growth through exposure to emerging markets.
• Focused on sustainable investing and climate change solutions.
• Comfortable with moderate volatility.

Fundamental Rating Based on AI:

8.5 out of 10

EMCR demonstrates strong fundamentals based on an AI-powered analysis. The ETF's unique focus, experienced management, and positive growth trajectory are key strengths. While the expense ratio is slightly higher than some competitors, the overall value proposition remains attractive.

Resources and Disclaimers:

• Xtrackers Emerging Markets Carbon Reduction and Climate Improvers ETF website: https://www.dws.com/en-us/institutional-investors/product-finder/etfs/equities/x-trackers-em-carbon-reduction-climate-improvers-ucits-etf-1c-eur-acc/
• S&P Emerging Markets Carbon Reduced Climate Improvers Index: https://www.spglobal.com/spdji/en/indices/equity/sp-emerging-markets-carbon-reduced-climate-improvers-index/

Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. Please conduct your own research and consult with a financial advisor before making any investment decisions.