Environmental, social, and governance investing is going to be DWS’ “big area of focus for this year as well as likely the next couple of years to come,” according to Arne Noack, DWS Head of Systemic Investment Solutions for the Americas.
“It’s the key pillar for our strategy here in the Americas as well as globally,” Noack told NYSE’s Judy Shaw for ETF Leaders, powered by the New York Stock Exchange.
Speaking at Exchange: An ETF Experience 2022, Noack said that “ESG here in the U.S. is very much in its infancy,” and that DWS brings “a different lens” to the market with its ESG funds, which is to dispel “a lot of misperceptions.”
“For example, ESG in our view does not cost performance,” Noack said. “ESG can very much apply to a standard… asset allocation process: you can stick to your guns when it comes to your investment process, to your performance expectations, to your outlook, and still have a meaningful impact when it comes to ESG principles.”
This means that through this process, an investor “can meaningfully reduce [their] carbon emissions in a portfolio without having to sacrifice performance.”
During the conversation with Shaw, Noack named the Xtrackers S&P 500 ESG ETF (SNPE ) among his favorite ETFs, which offers exposure to S&P 500 stocks screened for ESG factors. The fund excludes companies with disqualifying U.N. Global Compact scores, and those involved with tobacco or controversial weapons. The fund targets the 75% with the highest ESG scores. The portfolio holdings are market-cap weighted but adjusted to maintain broadly similar sector exposure to the parent index.
“It is basically an S&P 500 lookalike but has very important environmental, social, and governance-related filters that apply to its investment policy,” Noack said.
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