As investors reposition themselves following the Covid-19 outbreak, many investors have turned to strategies that focus on environmental, social, and governance (ESG) issues. Where ESG was once thought of as purely a “doing good” approach, recent markets have shown that ESG considerations can be critical for long-term risk management.
In the upcoming webcast, Income Investing – Adding ESG to the Equation, Bob Smith, President & Chief Investment Officer, Sage Advisory; Komson Silapachai, Vice President, Research & Portfolio Strategy, Sage Advisory; Margaret Dorn, Senior Director, ESG Product Strategy, S&P Dow Jones Indices; and Sean Edkins, Head of ETF Sales and Strategic Partnerships, DWS, will dig into potential benefits of ESG investing, and show how you can utilize ESG strategies to possibly enhance—or even replace—clients’ core portfolio positions.
DWS has broadened its ESG-related ETF suite to now include investment grade corporates, high yield and emerging markets bonds to round out its domestic and international equity offering.
Specifically, the Xtrackers Bloomberg Barclays US Investment Grade Corporate ESG ETF (Cboe: ESCR) seeks investment results that correspond generally to the performance, before fees and expenses, of the Bloomberg Barclays MSCI US Corporate Sustainability SRI Sector/Credit/Maturity Neutral Index.
The Xtrackers J.P. Morgan ESG USD High Yield Corporate Bond ETF (Cboe: ESHY) seeks investment results that correspond generally to the performance, before fees and expenses, of the J.P. Morgan ESG DM Corporate High Yield USD Index.
Lastly, the Xtrackers Bloomberg Barclays US Investment Grade Corporate ESG ETF (Cboe: ESCR) seeks investment results that correspond generally to the performance, before fees and expenses, of the Bloomberg Barclays MSCI US Corporate Sustainability SRI Sector/Credit/Maturity Neutral Index.
DWS Xtrackers now offers eight ESG ETFs that cover 70% of most model portfolio allocations, allowing all investors to now use ESG at the core of their portfolio.
On the equity side, the Xtrackers MSCI USA ESG Leaders Equity ETF (NYSE Arca: USSG) has been a popular play for investors seeking exposure to socially responsible investments. USSG was developed in collaboration with Ilmarinen, Finland’s largest pension insurance company. The underlying MSCI USA ESG Leaders Index provides exposure to large- and medium-cap U.S. companies with high environmental, social, and governance (ESG) performance relative to their sector peers.
Other options include the Xtrackers MSCI EAFE ESG Leaders Equity ETF (NYSEArca: EASG), Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (NYSEArca: EMSG), and Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (NYSEArca: ACSG). The ETFs try to provide exposure to companies with high ESG-related performance relative to their sector peers. The underlying index is based on MSCI ESG Ratings, MSCI ESG Controversies, and MSCI Business Involvement Screen Research to determine index components.
Additionally, the more recently launched Xtrackers S&P 500 ESG ETF (SNPE) is among the first ETFs to track the S&P 500 ESG Index, the environmental, social, and governance derivative of the widely followed S&P 500 Index. SNPE’s underlying index seeks to target 75% of the float market capitalization of each Global Industry Classification Standard Industry Group within the S&P 500 Index, using an ESG score as the defining characteristic.
ESG investments will become increasingly important for investors, especially as the Coronavirus pandemic brings greater attention to the investments needed to make the global economy, society, and environment more sustainable.
Financial advisors who are interested in learning more about ESG strategies can register for the Thursday, September 10 webcast here.