Xtrackers World Biodiversity Focus SRI UCITS ETF

Issuer: Xtrackers

Asset Class: Equity

TER: 35bps

Trading Currency: USD

Pays Income: False

Listing Date: 06 Nov 2023

Ticker: XBI0

ISIN: IE000E0V65D8

This investment product offers targeted exposure to global companies that are actively addressing the challenges of biodiversity loss, integrating both environmental and socially responsible investing (SRI) criteria. The underlying portfolio consists of large and mid-capitalisation stocks from developed markets, selected based on their performance across a range of environmental, social, and governance metrics. The strategy is designed to provide returns that correspond to the performance of its specific benchmark, which emphasizes companies leading in sustainable practices and those contributing positively to the preservation of natural ecosystems, while systematically excluding firms involved in activities deemed detrimental to the environment or society.

The selection methodology is rigorous, beginning with a broad universe of global developed market equities and applying several layers of screening. It first implements values-based exclusions, removing companies with significant business in areas such as controversial weapons, tobacco, and thermal coal. Subsequently, it applies a specialized biodiversity screen to identify and exclude companies with a significant negative impact on ecosystems, such as those involved in deforestation or land degradation. The process favors companies with strong environmental policies and a demonstrable commitment to sustainability. This dual focus ensures the portfolio is aligned not only with general SRI principles but also with the specific theme of protecting biodiversity.

This fund is tailored for investors seeking to make a tangible environmental impact through their portfolio, moving beyond broad ESG mandates to a more focused and crucial theme. It provides a means to support companies that are integral to a nature-positive economy, potentially benefiting from growing regulatory and consumer focus on environmental preservation. As an accumulating instrument, all dividend income is automatically reinvested back into the fund, which supports the potential for long-term capital growth through compounding. The direct physical replication method offers transparency, as the fund directly owns the shares of the companies in the index.