DWS announced the listing of the (USCA ), which seeks exposure to companies leading the way towards a low-carbon economy. The fund received an investment of approximately $2 billion on the first day of trading, making it the largest ETF launch of all time in the U.S.
The investment into USCA by Ilmarinen, Finland’s largest private earnings-related pension insurance company, is part of Ilmarinen’s investment strategy, which is aligned with its goal to achieve a carbon-neutral portfolio by the end of the year 2035.
“There’s a perception that demand for climate change-focused ETF remains uncertain, so it’s impressive to see strong institutional support for a new product,” said Todd Rosenbluth, head of research at VettaFi.
Regarding the fund’s launch, DWS Americas CEO Dirk Goergen said in a news release: “DWS is pleased to partner with Ilmarinen to establish this new Xtrackers fund in the U.S. to help drive the transition to a low carbon economy.”
Goergen added: “As we shared at our Capital Markets Day, we are focused on providing investors bespoke index investment solutions across asset classes and expanding the Xtrackers brand in the Americas with specialized products with attractive long term return opportunity.”
The fund seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI USA Climate Action Index, which is comprised of large- and mid-cap companies in the U.S. seen as leading their sector peers in taking actions relating to climate transition. Companies from the parent index, the MSCI USA Index, are assessed relative to their sector peers based on their emissions intensity, emissions reduction commitments, climate risk management, and revenue from greener businesses.
The underlying index uses this assessment to select 50% of the companies from each Global Industry Classification Standard (GICS) sector of the parent index. Overall, the underlying index targets a coverage of 50% of the companies from each GICS sector from the parent index.
USCA has an expense ratio of 0.07%.
USCA expands DWS’s suite of climate related and environmental, social, and governance (ESG) ETFs to 15; as of March 23, the suite consisted of 14 products with $4.5 billion in assets under management. DWS’s climate-related and ESG-focused ETFs represent roughly 24% of Xtrackers’ overall AUM in the U.S. of roughly $19.1 billion.
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