DWS has launched the Xtrackers MSCI EAFE ESG Leaders Equity ETF (EASG US) on NYSE Arca. The fund provides exposure to the performance of high ESG (Environmental, Social and Governance) rated companies from international equity markets.

EASG provides exposure to companies listed outside the US and Canada that have robust ESG ratings.
“More than one-quarter of assets under management globally are now being invested according to the premise that ESG factors can materially affect a company’s performance and market value,” said Fiona Bassett, Global Co-Head of Passive Asset Management and Global Co-Head of Products.
“Through our Xtrackers suite, our aim is to provide efficient access to international markets, asset classes or strategies that deliver new investment opportunities capitalizing on emerging trends. The ESG rating data incorporated in EASG could help investors better evaluate the risk and return potential of financial opportunities.”
EASG tracks the MSCI EAFE ESG Leaders Index through physical replication via a representative sampling strategy.
The index consists of large- and mid-capitalization companies across developed market countries, excluding Canada and the United States.
The methodology uses data analytics from MSCI ESG Research to screen the parent MSCI EAFE Index. Firstly, companies involved in alcohol, gambling, tobacco, nuclear power and weapons are excluded from the selection process as are those currently embroiled in ESG controversies.
The methodology then selects the companies with the highest ESG ratings so that the index includes approximately 50% of the market capitalization in each sector and region of the parent index. By targeting sector and region weights consistent with those of the parent index, the methodology seeks to limit the systematic risk introduced by the ESG selection process.
Companies that are not existing constituents of the ESG Leaders Indexes must have an MSCI ESG Rating of ‘BB’ or above and an MSCI ESG Controversies Score of 3 or above to be eligible for inclusion.
The index, which currently contains 458 constituents, is weighted by float-adjusted market capitalization and is rebalanced quarterly in February, May, August and November.
Stocks from Japan account for just under a quarter of the total index exposure, with the next largest country exposures being the UK (12.1%), France (10.8%), Germany (10.5%) and Australia (10.0%). The largest sector exposures are financials (19.5%), industrials (13.9%), consumer discretionary (12.5%) and health care (11.2%).
“We are excited that DWS’s new ETF will be based on the MSCI EAFE ESG Leaders Index,” said Christine Berg, Managing Director and Head of ETF Client Coverage in North America at MSCI. “More of the world’s investors are integrating ESG to manage the long-term risk and return drivers of their portfolios.”
The fund has an expense ratio of 0.14%. Income is distributed to investors on a quarterly schedule.