LONDON - Xtrackers II, an investment company with variable capital based in Luxembourg, has announced significant changes to its ESG Global Government Bond UCITS ETF, which will take effect today, Monday. These modifications to the fund, which is managed by DWS Investment S.A., are intended to enhance its environmental, social, and governance (ESG) criteria.
The fund's reference index, the FTSE ESG Select World Government Bond Index - DM, will now incorporate ESG data from the Sustainable Sovereign Risk Methodology (2SRM), an update from the previous Beyond Ratings Sovereign Risk Monitor (SRM). This shift reflects a broader industry trend towards more rigorous and comprehensive ESG assessment tools.
Additionally, the index will exclude countries with social violations based on international treaties, United Nations principles, and national laws, as well as those on the EU list of non-cooperative jurisdictions for tax purposes. This move aligns with increasing investor demand for ethical and responsible investment options.
In response to the growing focus on green finance, the fund will also introduce a green bond tilt. This ensures that eligible bonds meet a minimum threshold of green bond exposure within the index, while maintaining the ESG-tilted country exposures and index duration.
As a result of these changes, the minimum share of sustainable investments for the Xtrackers II ESG Global Government Bond UCITS ETF will increase from 0% to 5%. It is important to note that while the fund will invest a portion of its assets in sustainable investments, it does not have sustainable investments as its stated objectives.
For shareholders who find these changes inconsistent with their investment goals, the company offers the option to redeem shares without any redemption charge, in line with the terms set out in the fund's prospectus.
The updated prospectus, key information document, and pre-contractual information on sustainable investments reflecting these changes will be available on the Xtrackers website around the effective date. These documents can also be requested free of charge at the registered office of the company or through its foreign representatives.
These updates come as the investment community increasingly prioritizes ESG factors in their decision-making processes. Shareholders seeking clarity or advice on these changes are encouraged to consult independent financial advisors. This article is based on a press release statement from Xtrackers II.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.