Strength in Xtrackers MSCI Em Mkts Hdg Eq ETF's People Pillar is partially offset by an Average Process Pillar rating, leading to a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy merits an Average Process Pillar rating. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating. People, Process and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

JPMorgan BetaBuilders Canada ETF

Nuvn PA Mun Val Shs of Benef Interest

Stewart Information Services

First Trust Multi Cap Value AlphaDEX Fund

Gold Fields Ltd.

Fisker

Yum China Hlds

Pimco Income Opportunity Fund

Credicorp

Southern Copper

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Xtrackers MSCI Em Mkts Hdg Eq ETF earns an Average Process Pillar rating. 
The investment strategy as stated in the fund's prospectus is:  The investment seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI EM US Dollar Hedged Index.  The fund, using a "passive" or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the underlying index, and which is designed to track emerging market performance while mitigating exposure to fluctuations between the value of the U.S. dollar and the currencies of the countries included in the underlying index. It will invest at least 80% of its total assets in component securities of the underlying index. 

 The portfolio has allocations in its top two sectors, basic materials and utilities, that are similar to the category. The sectors with low exposure compared to category peers are technology and consumer defensive; however, the allocations are similar to the category. The portfolio is composed of 1,364 holdings and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 23.0% of the fund’s assets were concentrated in the top 10 fund holdings, as opposed to the category’s 25.3% average. And in closing, in terms of portfolio turnover, on a year-over-year basis, 16% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position. 

 Note: The Process Pillar rating is indirectly assigned by an analyst. When an analyst covers a passively managed vehicle that tracks a particular index, Morningstar associates the Process Pillar rating assigned to that vehicle with the index concerned. Morningstar then maps the Process Pillar rating associated with a given index to any other uncovered passive strategies that track the same index. This ensures that the analyst’s view is leveraged whenever available and promotes consistency when assigning Process Pillar ratings to passive vehicles associated with a given index.

Average

Process

Xtrackers’s equity team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are four managers listed on the fund: Shlomo Bassous, Bryan Richards, Patrick Dwyer, Ashif Shaikh. Experience on the team is abundant, with 17 years of average portfolio management experience. Together, they manage a total of 32 strategies, with a Silver asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Above Average

People

In the past two years, DWS has been under heavy scrutiny from the SEC and German authorities owing to greenwashing allegations that were initially raised in August 2021 by the firm’s former chief sustainability officer Desiree Fixler. The SEC announced on Sept. 25, 2023, that it has fined DWS USD 19 million for failing to implement procedures to ensure that all investment staff members were following its environmental, social, and governance policies. This relates to funds where ESG factors were analyzed alongside other financially material factors, but where managers retained discretion over ESG outcomes. In addition, the firm was ordered to pay USD 6 million for deficiencies in its anti-money-laundering processes that were uncovered in a separate investigation. The investigation by the German authorities into the firm's ESG disclosures is still ongoing.  
The SEC findings underline that despite strong senior management commitment, it takes a considerable amount of time and resources to embed sustainability across all levels of an organization for firms without a long-standing sustainability heritage. Overconfidence and failure to deal with internal criticism adequately appear to have contributed to DWS' misleading statements on ESG matters. While it's difficult to quantify the financial damage to clients and no misstatements were detected in financial disclosures or prospectuses, we believe the firm’s shortcomings have the potential to adversely affect investor outcomes. Hence, we welcome DWS' efforts to strengthen governance around ESG integration and communicate more conservatively about its ESG capabilities.
Questionable and unsteady leadership has contributed to the DWS' woes. Previous CEO Asoka Woehrmann, who had spearheaded the firm's ESG push, stepped down in June 2022 as a result of the ESG investigations. His credibility had already been harmed following his use of personal email for business purposes and a large payment made to him by a client when he was head of Deutsche Bank's private-client business before being appointed as DWS' CEO in 2018. His successor Stefan Hoops is the firm's sixth CEO in the past 10 years, highlighting the instability in the firm's top leadership. This appointment also shows the continued influence of its parent company, even after the partial IPO in 2018. Hoops has spent most of his career at Deutsche Bank but has no asset-management background.
Despite all these negative headlines and shaky leadership, DWS has managed to remain quite stable in its investment ranks. The firm has also made strides to gain greater independence. For example, since 2020, bonuses have been linked to the firm's own performance rather than to that of the bank as a whole, which supports alignment and talent retention. Variable remuneration takes into account performance of up to five years.
DWS' vast fund lineup covers all asset classes, including passive strategies, which are offered under the Xtrackers brand. Many offerings don't distinguish themselves, but there are genuine areas of strength among active strategies, and fees are competitive across many funds. While the product development process has been streamlined, and although the firm has launched new strategies at a slower pace, lineup turnover remains a concern as a culture of asset-gathering prevails. New offerings are partly related to an expansion of ESG capabilities, but the firm is also building out its thematic equity, multi-asset, alternatives, and exchange-traded fund range. 
At this stage, we continue to believe that DWS' strengths justify a Parent Pillar rating of Average despite several weaknesses in its stewardship practices, but we will closely monitor the company for further disruption.

Parent

Xtrackers MSCI Emerging Markets Hedged Equity ETF

DBEM tracks a market-cap-weighted index of emerging firms hedged for currency exposure.

CSOP FTSE China A50 ETF

Xtrackers Harvest CSI 300 China A-Shares ETF

Xtrackers Harvest CSI 500 China A-Shares Small Cap ETF

Xtrackers MSCI China A Inclusion Equity ETF

Avantis Emerging Markets Equity ETF

Avantis Emerging Markets Value ETF

VanEck Vectors Brazil Small-Cap ETF

Direxion Daily MSCI Brazil Bull 2X Shares

ProShares UltraShort MSCI Brazil Capped

Morgan Stanley China A Share Fund Inc

Direxion Daily CSI 300 China A Share Bull 2X Shares

VanEck Vectors ChinaAMC SME-ChiNext ETF

iShares MSCI China A ETF

WisdomTree China ex-State-Owned Enterprises Fund

Dimensional Emerging Markets Value ETF

Franklin Emerging Market Core

Direxion Daily Emerging Markets Bull 3X Shares

Direxion Daily Emerging Markets Bear 3X Shares

iShares MSCI Emerging Markets ETF

ProShares Ultra MSCI Emerging Markets

ProShares UltraShort MSCI Emerging Markets

Xtrackers Emerging Markets Carbon Reduction and Climate Improvers ETF

Templeton Emerging Markets Fund

Global X Next Emerging & Frontier ETF

iShares MSCI Emerging Markets ex China ETF

WisdomTree India Earnings Fund

iShares MSCI EM ESG Optimized ETF

ProShares Short MSCI Emerging Markets

iShares MSCI Brazil ETF

iShares MSCI Brazil Small-Cap ETF

First Trust Brazil AlphaDEX Fund

First Trust Emerging Markets AlphaDEX Fund

Franklin FTSE Brazil ETF

Franklin FTSE India ETF

iShares MSCI Frontier 100 ETF

Freedom 100 Emerging Markets ETF

iShares Currency Hedged MSCI Emerging Markets ETF

iShares Core MSCI Emerging Markets ETF

Morgan Stanley India Investment Fund Inc

Columbia India Consumer ETF

iShares MSCI India ETF

Nifty India Financials ETF

Direxion Daily MSCI India Bull 2X Shares

iShares India 50 ETF

JPMorgan Emerging Markets Equity Core ETF

KraneShares MSCI All China Index ETF

KraneShares Bosera MSCI China A Share ETF

KraneShares SSE STAR Market 50 Index ETF

iShares ESG MSCI EM Leaders ETF

PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF

First Trust India NIFTY 50 Equal Weight ETF

Invesco India ETF

First Trust RiverFront Dynamic Emerging Markets ETF

Hartford Multifactor Emerging Markets ETF

Schwab Emerging Markets Equity ETF

iShares MSCI India Small Cap ETF

SPDR Portfolio Emerging Markets ETF

Vanguard FTSE Emerging Markets ETF

WisdomTree Emerging Markets ex-State-Owned Enterprises Fund

Emerging markets continued to expand at a solid pace midway into the first quarter of 2024, supported by broad-based expansion across both manufacturing and service sectors.

Emerging Markets Growth Remains Solid Amid Intensifying Inflationary Pressures

Emerging Markets Funds are made up of funds that seek long-term capital appreciation. Nigeria and Emerging Markets Europe have been the two areas that have seen the highest year-to-date and May returns. With the U.S. looking to pause rate hikes, we may see inflows coming back to domestic funds.

Emerging Markets Funds See Top 10 Weekly Outflow On Record

iShares Core Growth Allocation ETF

Vanguard Total International Bond ETF

Capital Group International Focus Equity ETF

WisdomTree Emerging Markets High Dividend Fund

ALPS Emerging Sector Dividend Dogs ETF

Invesco S&P Emerging Markets Low Volatility ETF

Emerging Markets Internet & Ecommerce ETF

iShares MSCI Taiwan ETF

iShares Core International Aggregate Bond ETF

KraneShares CSI China Internet ETF

Matthews Emerging Markets Equity Active ETF

Invesco Emerging Markets Sovereign Debt ETF

Emerging markets can come with a lot of growth potential. However, they also usually have more volatility than you might get with developed markets.

VettaFi Voices On: Investing in Emerging Markets

Xtrackers MSCI All World ex US Hedged Equity ETF

Xtrackers MSCI EAFE Hedged Equity ETF

After a rough 2022, some investors are eying international equities to make up for their losses. Not only are many of the world's most competitive companies trading at bargain-basement prices, but some strategists believe that global stocks are poised to rally.

Invest in International Equities With DBAW, DBEF & DBEM

The U.S. dollar is at its highest level since 2000. According to the IMF, since the start of this year, the dollar has appreciated 22% against the yen, 13% against the euro, and 6% against emerging market currencies.

Consider Currency-Hedged ETFs While the Dollar Is at a Record High

Xtrackers MSCI Europe Hedged Equity ETF

Xtrackers MSCI Eurozone Hedged Equity ETF

Xtrackers MSCI Germany Hedged Equity ETF

Xtrackers MSCI Japan Hedged Equity ETF

Xtrackers MSCI All World ex US High Dividend Yield Equity ETF

Xt EAFE Div Yld Shs

International currency moves will impact investors' foreign equity allocations, but investors can turn to currency-hedged exchange traded fund strategies to mitigate the foreign exchange risks and provide a purer play on the underlying overseas markets. In the upcoming webcast, A Strategy to Thrive in a Strong U.S.

Currency Hedged ETFs Could Help Better Manage Your International Market Exposure

As the U.S. dollar strengthens amid changing central bank monetary policy, global equity investors could find their international market exposures experiencing unintended foreign exchange currency risks. In the upcoming webcast, A Strategy to Thrive in a Strong U.S.

A Strategy to Thrive in a Strong U.S. Dollar Environment

Currency markets are often overlooked and misunderstood. But as central banks eye new rate changes and inflation proves less transitory than expected, investors would do well to carefully consider how currency exchange rates can impact their international equity allocations.

DWS's Currency Forecast for 2022: Don't Be Caught Off-Guard by Currency Fluctuations

Xtrackers MSCI All China Equity ETF

Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF

ETF provider DWS offers a plethora of products that enable investors want to get tactical with their portfolios. When it comes to their current top-performing funds, three stand out among a very distinguished crowd.

Snag Emerging Markets Exposure with 3 Trending ETFs

A risk-on sentiment is permeating into the capital markets again. Investors can partake in riskier assets like emerging markets more safely with ETFs with a hedging component like the Xtrackers MSCI Emerging Markets Hedged Equity ETF (DBEM).

Capture Upside while Preventing Downside with the DBEM ETF

Just when it seems like it was safe to get back into the markets and turn on the risk again, a second wave of Covid-19 cases brought more market uncertainty back.

Diversify & Plan for Uncertainty with Currency Hedging Strategies

Getting emerging markets (EM) exposure can be a slippery slope to climb since the value of its assets will be affected by the strength or weakness of the local currency. This underscores the importance of having a currency hedging component, which investors can get built in to ETFs like the Xtrackers MSCI Emerging Markets Hedged [.

DBEM and The Benefits of Currency Hedging in Emerging Markets

WisdomTree Bloomberg US Dollar Bullish Fund

Invesco DB US Dollar Index Bullish Fund

Just when it looked like the dollar was starting to gain the momentum it lost since the Covid-19 pandemic put a stranglehold on the capital markets, the greenback started to retreat on more market uncertainty. The markets are now focused on stimulus measures and whether the White House can agree to terms on a deal.

Now May Be a Good Time to Hedge Against the Dollar

Gold’s serendipitous rise amid an investors mindset dominated by uncertainty is doing no favors for the U.S dollar. The greenback has been getting pummeled as of late, but not as bad as certain emerging market currencies, which reminds traders to make sure they’re hedging their currency bets.

Make Sure You Hedge Those Emerging Markets Currencies Bets

Emerging markets continue to present investors with a value-oriented play for those bold enough to take them on amid the uncertainty known as the Covid-19 pandemic. For certain emerging markets, however, they could give major U.S.

Will Certain Emerging Market Economies Outperform the U.S.

The latest rise in the euro is feeding into much-needed strength for emerging markets (EM) currencies, which is a positive sign given that EM assets typically correlate with the strength of their respective currencies. Another factor contributing to euro strength is the weakening dollar.

Euro Strength is Feeding Into Emerging Markets

Travel restrictions as a result of the pandemic have obviously taken a toll on tourists taking to the skies to head overseas, but domestic travel could see a rise—something that could help breathe some much-needed life into emerging markets (EM). “Since the COVID-19 outbreak was first reported in China in December 2019, some 5.58 million [.

Can Domestic Travel Breathe Life Back Into Emerging Markets?

Invesco BLDRS Emerging Markets 50 ADR Index Fund

SPDR MSCI Emerging Markets Fossil Fuel Free ETF

Vrts Gt Emg Mrk Shs

Guggenheim Shs MSCI Emerging Markets Equal Country Weight

Franklin LibertyQ Emerging Markets ETF

Invesco RAFI Strategic Emerging Markets ETF

Morgan Stanley Emerging Markets Fund Inc

Price swings have been dramatic. For example, we've seen 8 +/- 4% absolute moves in the MSCI Emerging Markets Index in the last two weeks of March.

Navigating Emerging Markets During Uncertain Times: This Too Shall Pass

If an investor is looking into international markets, one should consider potential currency risks and incorporate a currency-hedged exchange traded fund strategy into a diversified portfolio.

Currency-Hedged ETFs for Strategic International Market Exposure

As international central banks adjust their monetary policies to support further growth in the global economy, investors who are considering foreign market exposure should also look into currency-hedged exchange traded funds that limit potential foreign exchange risks. “Where it’s really, for us, becomes interesting is how that affects currencies, and you know we’ve been really [.

Currency-Hedged ETF Investing to Limit Foreign Exchange Risks

News for Xtrackers MSCI Emerging Markets Hedged Equity ETF ETF (DBEM)