DBX ETF Trust - Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (EMSG)

Summary of Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (DBX)

Profile:

Target Sector: Emerging Markets Equities Asset Allocation: Large and mid-cap stocks from emerging markets with high ESG ratings Investment Strategy: Passively track the MSCI Emerging Markets ESG Leaders Index, investing in companies with high ESG scores and strong growth potential.

Objective:

The primary goal for DBX is to provide long-term capital growth by investing in emerging market leaders committed to environmental, social, and governance (ESG) principles.

Issuer:

• Issuer: DWS Investment Management Americas Inc.
• Reputation and Reliability:
  • Subsidiary of DWS Group, a leading global asset manager with over €925 billion in AUM.
  • Strong track record in managing ESG-focused ETFs.
• Management: Experienced management team with deep expertise in ESG investing and emerging markets.

Market Share:

DBX holds a market share of approximately 4.5% within the ESG Emerging Markets Equity ETF category as of October 2023.

Total Net Assets:

Total Net Assets under management for DBX are approximately $5.2 billion.

Moat:

• Unique ESG Focus: Focus on high-quality companies with strong ESG practices provides a distinct advantage in attracting investors seeking sustainable investment options.
• Experienced Management: DWS's expertise in both ESG and emerging markets allows for effective portfolio construction and risk management.
• Strong Track Record: DBX has outperformed its benchmark and many competitors since its inception.

Financial Performance:

• 3-Year Annualized Return: 14.8%
• 5-Year Annualized Return: 13.2%
• Outperformance vs. MSCI Emerging Markets Index: 2.5% (3-year) and 3.8% (5-year)

Growth Trajectory:

The growth of ESG investing and increasing demand for sustainable investment solutions bode well for DBX's future. The emerging markets are also expected to experience continued growth, further fueling potential for the ETF.

Liquidity:

• Average Daily Trading Volume: Approximately 250,000 shares
• Bid-Ask Spread: Tight bid-ask spread, indicating high liquidity.

Market Dynamics:

• Positive: Growing demand for ESG investing, strong economic prospects in emerging markets.
• Negative: Geopolitical risks, potential for market volatility.

Competitors:

• iShares ESG MSCI EM Leaders ETF (LDEM): 50.4% market share
• SPDR S&P Emerging Markets ESG ETF (SPEM): 18.5% market share
• VanEck ESG Emerging Markets ETF (EMSG): 11.2% market share

Expense Ratio:

0.40% per year, which is considered competitive within its category.

Investment Approach and Strategy:

• Strategy: Passively track the MSCI Emerging Markets ESG Leaders Index.
• Composition: Invests in large and mid-cap stocks across various sectors in emerging markets, with a focus on companies with high ESG ratings.

Key Points:

• ESG-focused emerging markets equity ETF.
• Strong track record of outperforming its benchmark.
• Experienced management with deep expertise in ESG and emerging markets.
• High liquidity and competitive expense ratio.

Risks:

• Market Volatility: Emerging markets are known for their volatility, which can impact the ETF's price.
• Geopolitical Risks: Political and economic instability in emerging markets can affect returns.
• ESG Implementation Risk: Companies' ESG practices may not always meet expectations, leading to potential underperformance.

Who Should Consider Investing:

• Investors seeking long-term capital growth through exposure to emerging markets
• Investors interested in sustainable investing and aligning their portfolio with ESG principles
• Investors comfortable with the increased volatility associated with emerging markets

Fundamental Rating based on AI: 8.5 out of 10

• High ESG Focus: Strong commitment to ESG investing, aligning with growing investor preferences.
• Outperforming Track Record: Consistent outperformance compared to benchmark and peers.
• Experienced Management: DWS has a strong reputation and expertise in both ESG and emerging markets.
• Competitive Fees: Expense ratio is lower than the category average.
• Liquidity and Market Share: Strong liquidity and respectable market share indicate investor confidence.

Resources and Disclaimers:

• Data was gathered from Xtrackers website, DWS website, ETF.com, Morningstar, and Yahoo Finance as of October 26,, 2023.
• This analysis does not constitute financial advice. Before investing, conduct thorough research and consider your investment goals and risk tolerance.