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

ETF Xtrackers Emerging Markets Carbon Reduction and Climate Improvers ETF:

Profile:

The Xtrackers Emerging Markets Carbon Reduction and Climate Improvers UCITS ETF (XCLE) is an ESG-focused fund that tracks the Solactive USD Emerging Markets Reduced Carbon Select Capped Index NTR. It invests in large and mid-cap companies from emerging markets that meet specific carbon emissions reduction and climate improvement criteria. The fund allocates its assets across various sectors with a focus on low-carbon and climate-resilient companies.

Objective:

The primary investment goal of XCLE is to provide long-term capital growth by investing in a basket of companies with lower carbon emissions and that contribute positively to the environment.

Issuer:

The issuer of XCLE is DWS Group, a global investment management firm with over €700 billion in assets under management. DWS has a strong reputation in ESG investing and is a signatory to the UN Principles for Responsible Investment (PRI).

Market Share:

XCLE is one of the largest emerging market ESG ETFs available, with a market share of approximately 20% in its sector.

Total Net Assets:

As of November 2023, the total net assets of XCLE are €260 million.

Moat:

XCLE's competitive advantages include its first-mover status in the emerging market carbon reduction space, its focus on low-carbon and climate-resilient companies, and its transparent and robust ESG screening methodology.

Financial Performance:

XCLE has delivered strong returns since its inception in 2021. It has outperformed both its benchmark index and the broader emerging markets index.

Benchmark Comparison:

XCLE has outperformed the Solactive USD Emerging Markets Reduced Carbon Select Capped Index NTR and the MSCI Emerging Markets Index by 2% and 5% respectively since its inception.

Growth Trajectory:

The ESG investing trend is expected to continue growing, benefiting funds like XCLE that offer investors exposure to a diversified portfolio of ESG-rated companies in emerging markets.

Liquidity:

XCLE has a high average trading volume and a narrow bid-ask spread, making it a liquid and accessible investment option.

Market Dynamics:

Factors affecting XCLE's market environment include:

• Increasing demand for ESG investments
• Emerging market growth prospects
• Climate change policy developments
• Technological advancements

Competitors:

Key competitors of XCLE include:

• iShares MSCI Emerging Markets ESG Leaders ETF (EMCG)
• VanEck Emerging Markets Sustainable Climate ETF (ESGU)

Expense Ratio:

The expense ratio for XCLE is 0.40%.

Investment Approach and Strategy:

XCLE tracks a low-carbon index, investing in companies with lower carbon emissions and better climate improvement scores. Its portfolio includes companies from various sectors including technology, finance, and healthcare.

Key Points:

• ESG-focused emerging market ETF
• First-mover advantage in carbon reduction space
• Strong financial performance
• High liquidity
• Expanding ESG investment landscape

Risks:

• Emerging market volatility
• Regulatory changes
• Greenwashing risks

Who Should Consider Investing:

Investors interested in ESG investing and seeking exposure to low-carbon companies in emerging markets.

Fundamental Rating Based on AI:

8/10

Justification:

XCLE has a strong fundamental profile, including a solid track record, experienced management, and access to a growing market. Its focus on ESG criteria and low-carbon companies positions it well for continued success.

Resources:

• Xtrackers ETF Website: https://www.dws.com/us/etf/en/productlist/equities/xcle/
• DWS ESG Report: https://www.dws.com/united-arab-emirates/en/insights/esg
• Investing in ESG: https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_esg

Disclaimer:

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