DWS announced today the launch of a new Xtrackers exchange traded fund. The Xtrackers Net Zero Pathway Paris Aligned U.S. Equity ETF (USNZ ) provides large- and mid-cap U.S. equity exposure aligned with an internationally recognized framework and is designed to capture the move of the global economy to a net-zero emissions environment.
Listed today on the New York Stock Exchange, USNZ is designed to align with the objective of transforming economies to net zero. It provides exposure to a unique Paris Aligned Benchmark (PAB) index that uses a transparent set of rules aiming to be at the cutting edge of sustainable investment practices.
The index is designed to provide a 50% reduction in carbon intensity versus a market capitalization-weighted U.S. equity index, and a carbon intensity reduction trajectory of 7% year-over-year. It provides an evidence-based, statistically driven “pathway” to net zero, aligned with the Paris Climate Accords and their two main objectives: to achieve a net-zero emissions economy by 2050 and limit the rise in global temperature to 1.5°C above pre-industrial levels.
“There is a clear need for investments that align with net zero aims,” said Arne Noack, head of systematic investment solutions, Americas, at DWS, in a news release. “USNZ provides a powerful net zero investment strategy that meets the latest regulatory standards that govern Paris aligned benchmark indices as defined above.”
Noack added: “DWS has a long history of providing ETF investors with specialist investment opportunities that combine the efficiency of passive investing with the advantages of well thought out, rules-based strategies for particular needs. This new listing is another example of that.”
In addition to meeting PAB regulations, the index also aims to comply with recommendations published by the Institutional Investors Group on Climate Change (IIGCC), specifically its Net Zero Investment Framework.
DWS engaged with index provider Solactive to develop the index, which is called the Solactive ISS ESG United States Net Zero Pathway Enhanced Index. It consists of 386 U.S. large- and mid-cap stocks and is re-balanced semi-annually.
Amanda Rebello, head of passive sales at DWS, U.S. Onshore, commented: “Our clients are keen to play a positive role in helping society reach net zero, and we are confident that this new ETF, with its rigorous index methodology run by Solactive, can help seek to meet that need.”
USNZ has an expense ratio of 0.1%.
The launch augments the $4.2 billion lineup of ESG- and climate-focused Xtrackers ETFs in the U.S. that span all major asset classes.
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