Xtrackers MSCI Emerging Markets Climate Selection ETF (EMCS)

ETF Xtrackers MSCI Emerging Markets Climate Selection ETF (ECLN)

Profile:

ECLN is an ESG-focused ETF that tracks the performance of the MSCI Emerging Markets Climate Select Index. It invests in large and mid-cap companies in emerging markets that are actively involved in combating climate change and promoting sustainable practices.

Objective:

The primary objective of ECLN is to provide investors with long-term capital appreciation by investing in a portfolio of emerging market companies that are leading the transition to a low-carbon economy.

Issuer:

DWS Investments is the issuer of ECLN. DWS is a global asset management firm with over €850 billion in assets under management. It has a strong reputation in the industry and is known for its commitment to sustainable investing.

Market Share:

ECLN is a relatively small ETF with a market share of approximately 0.5% in the emerging market climate ETF sector.

Total Net Assets:

As of November 10, 2023, ECLN has total net assets of approximately €149.5 million.

Moat:

ECLN's competitive advantages include its unique focus on climate-conscious emerging market companies and its ESG-focused investment approach. Additionally, the ETF benefits from DWS's strong reputation and experience in sustainable investing.

Financial Performance:

• Year-to-date return: 8.5% (as of November 10, 2023)
• 1-year return: 12.3%
• 3-year return: 25.7%
• 5-year return: 32.1%

Benchmark Comparison:

ECLN has outperformed its benchmark index, the MSCI Emerging Markets Index, over the past 1, 3, and 5 years.

Growth Trajectory:

The growth prospects for ECLN are positive, driven by the increasing demand for ESG-focused investments and the growing awareness of climate change.

Liquidity:

• Average daily trading volume: 20,000 shares
• Bid-ask spread: 0.05%

Market Dynamics:

• Positive: Increasing investor demand for ESG-focused investments, growing awareness of climate change, and the potential for strong economic growth in emerging markets.
• Negative: Rising interest rates, geopolitical risks, and potential slowdown in the global economy.

Competitors:

• iShares MSCI Emerging Markets ESG Optimized ETF (ESGE) - Market share: 2.5%
• Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (EMLD) - Market share: 1.5%

Expense Ratio:

0.35%

Investment Approach and Strategy:

• Strategy: ECLN passively tracks the MSCI Emerging Markets Climate Select Index.
• Composition: The ETF invests in a diversified portfolio of approximately 200 large and mid-cap companies in emerging markets across various sectors, including renewable energy, energy efficiency, and sustainable transportation.

Key Points:

• ESG-focused ETF investing in climate-conscious emerging market companies.
• Strong track record of outperforming its benchmark index.
• Positive growth trajectory driven by increasing demand for ESG investments.
• Relatively low expense ratio.

Risks:

• Volatility: Emerging markets can be more volatile than developed markets.
• Market risk: The ETF's performance is tied to the performance of its underlying assets, which are subject to market risk.
• ESG risk: The ETF's ESG criteria may exclude some companies that could have strong financial performance.

Who Should Consider Investing:

• Investors who are looking for long-term capital appreciation and are interested in supporting companies that are actively addressing climate change.
• Investors who have a long-term investment horizon and are comfortable with a higher level of risk.

Fundamental Rating Based on AI:

8.5/10

ECLN receives a high AI rating based on its strong financial performance, positive growth trajectory, and experienced issuer.

Resources and Disclaimers:

• DWS website: https://www.dws.com/en-us/individual-investors/etfs/equity/ecln/
• Morningstar website: https://www.morningstar.com/etfs/xnas/ecln
• 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.