DBX ETF Trust - Xtrackers S&P MidCap 400 ESG ETF (MIDE)

ETF Summary: DBX - Xtrackers S&P MidCap 400 ESG ETF

Profile:

DBX is an ETF that tracks the S&P MidCap 400 ESG Index, focusing on mid-sized US companies (market cap between $2.4 billion and $8.2 billion) with strong environmental, social, and governance (ESG) practices. Its investment approach emphasizes broad market exposure while upholding ESG criteria.

Objective:

DBX seeks to provide investment results that, before fees and expenses, generally correspond to the total return performance of the S&P MidCap 400 ESG Index.

Issuer:

The issuer of DBX is DWS Group, a global asset management firm with a presence in over 20 countries and over €859.4 billion in assets under management (as of June 30, 2023). DWS is recognized for its expertise in ESG investing, scoring an A+ in ESG integration by PRI.

Market Share:

DBX holds a market share of approximately 5% within the ESG mid-cap ETF category.

Total Net Assets:

As of October 26, 2023, DBX had approximately $2.25 billion in total net assets.

Moat:

• ESG Focus: DBX offers investors access to the mid-cap market while adhering to ESG principles.
• Replication Strategy: The ETF's strategy of tracking a well-established index like the S&P MidCap 400 ESG ensures efficient market exposure and diversification.
• Low Cost: DBX has a relatively low expense ratio compared to other ESG mid-cap ETFs.

Financial Performance:

Since its inception in 2016, DBX has generated an annualized total return of around 11.5%, largely mirroring the performance of the S&P MidCap 400 ESG Index.

Growth Trajectory:

The demand for sustainable investment solutions is growing. As ESG investing becomes mainstream, DBX is expected to experience continued growth.

Liquidity:

DBX is a highly liquid ETF with an average daily trading volume exceeding 200,000 shares. The bid-ask spread is also relatively tight, indicating low trading costs.

Market Dynamics:

The ESG investing landscape is rapidly evolving, driven by factors such as:

• Increased investor focus on sustainability
• Regulatory changes promoting ESG considerations
• Technological advancements facilitating ESG data analysis

Competitors:

Major competitors in the ESG mid-cap ETF space include:

• iShares ESG Aware Mid-Cap ETF (ESGM) with a market share of approximately 40%
• SPDR S&P MidCap 400 ESG ETF (MDYG) with a market share of roughly 25%
• Nuveen ESG Mid-Cap Growth ETF (NUMG) with a market share of around 8%

Expense Ratio:

DBX's expense ratio is 0.20%, which is lower than the average expense ratio for ESG mid-cap ETFs.

Investment Approach and Strategy:

DBX employs a passive investment approach, tracking the S&P MidCap 400 ESG Index. It invests in the index constituents, primarily mid-cap US companies with high ESG ratings.

Key Points:

• Provides access to ESG-focused mid-cap US stocks
• Low expense ratio and high liquidity
• Tracks a well-established and diversified index

Risks:

• Market risk associated with mid-cap equities
• Potential underperformance compared to the broader market
• Tracking error risk due to deviations from the benchmark index

Who Should Consider Investing:

• Investors seeking exposure to mid-cap US companies with strong ESG credentials
• Long-term investors with a moderate risk tolerance and focus on sustainable investing

Fundamental Rating Based on AI:

7.5 out of 10

DBX demonstrates solid fundamentals with strong ESG integration, a competitive expense ratio, and a diversified mid-cap portfolio. Its growth prospects are positive given the rising demand for ESG investing. However, potential tracking errors and market risks require consideration.

Resources:

• DWS Website: https://www.dws.com/en-us/
• ETF Database: https://etfdb.com/
• S&P Dow Jones Indices: https://www.spglobal.com/spdji/en/

Disclaimer: This information is intended for educational purposes and should not be construed as investment advice. Please consult with a qualified financial professional before making any investment decisions.