First U.S. ETF Tracking S&P 500 ESG Index Draws $25 Million
June 27 2019 - 10:37AM
Dow Jones News
By Dieter Holger
The first U.S. exchange-traded fund tracking the new
environmental, social and governance version of the S&P 500 has
attracted $25 million in assets as it enters its second day of
trading.
DWS Group GmbH & Co. KGaA (DWS.XE), the asset-management arm
of Deutsche Bank AG (DBK.XE), launched the Xtrackers S&P 500
ESG ETF (SNPE) on the New York Stock Exchange on Wednesday. The
fund charges an expense ratio of 0.11% or $11 for every $10,000
invested, placing it a price point below most ESG ETFs on the
market today.
The ETF tracks the S&P 500 ESG Index that S&P Global
Inc. (SPGI) debuted in early April. Later that month, UBS Group AG
(UBS) launched the first ETF following the index, the UBS ETF
S&P 500 ESG UCITS ETF, on European exchanges.
The ESG index seeks to deliver the same risk and return as its
parent benchmark, while targeting 75% of the S&P 500's
traditional market capitalization. It screens out tobacco, makers
of certain weapons and companies with a low score as defined by the
United Nations Global Compact principles for responsible
businesses.
"The index helps investors align their investments with their
values while still achieving a risk and return profile in line with
the S&P 500," said Reid Steadman, S&P's global head of ESG
indices.
Asset managers have rapidly expanded their range of sustainable
funds in recent years to meet demand from investors. Around 80% of
the ESG ETFs available globally were put on the market in the last
five years, according to research firm Morningstar.
The S&P 500 ESG ETF follows in the footsteps of DWS's
Xtrackers MSCI USA ESG Leaders Equity ETF (USSG) launch in March,
which was one of the most successful fund debuts of all time thanks
to a more than $800 million investment from Finnish pension
insurance company Ilmarinen. USSG now holds close to $1.9 billion
in assets and is the second largest ESG ETF by market value,
according to FactSet. It charges $10 for every $10,000 invested,
slightly below DWS's latest ESG ETF.
"Our clients seek solutions that not only deliver on their
investment strategy, but also help them achieve their
sustainability goals," said Luke Oliver, head of index investing
for the Americas at DWS.
Write to Dieter Holger at dieter.holger@dowjones.com;
@dieterholger
(END) Dow Jones Newswires
June 27, 2019 10:22 ET (14:22 GMT)
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