A sound investment process and strong management team underpin Xtrackers S&P 500 ESG ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy merits a High 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

Microsoft

Apple

NVIDIA

Amazon

Alphabet

Eli Lilly

JPMorgan Chase & Co

UnitedHealth Group

Visa

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 S&P 500 ESG ETF earns a High 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 S&P 500 ESG Index.  The index is a broad-based, market capitalization weighted index that is designed to measure the performance of companies meeting environmental, social and governance (ESG) criteria, and while maintaining similar overall industry group weights as the S&P 500 Index. The fund uses a full replication indexing strategy to seek to track the underlying index. It is non-diversified. 

 The portfolio is overweight in technology by 5.2 percentage points in terms of assets compared with the category average, and its consumer cyclical allocation is similar to the category. The sectors with low exposure compared to category peers are industrials and financial services, with industrials underweighting the average portfolio by 3.4 percentage points of assets and financial services similar to the average. The portfolio is positioned across 319 holdings and is diversified among those holdings. In its most recent portfolio, 40.5% of the strategy's assets were concentrated in the top 10 fund holdings, as opposed to the category’s 48.8% average. And finally, in terms of portfolio turnover, on a year-over-year basis, 9% of the fund's holdings have changed, 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.

High

Process

Xtrackers S&P 500 ESG ETF's strong team drives the strategy's Above Average People Pillar rating. There are four managers listed on the fund: Shlomo Bassous, Bryan Richards, Patrick Dwyer, Ashif Shaikh. The team is well equipped, with an average of 17 years of portfolio management experience. Together, they manage a total of 32 strategies, with a Silver asset-weighted average Morningstar Medalist Rating, demonstrating their 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.

Average

Parent

Xtrackers S&P 500 ESG ETF

SNPE tracks a principles-selected, market cap-weighted index of US large-cap securities.

FlexShares STOXX US ESG Impact Index Fund

iShares MSCI EM ESG Optimized ETF

iShares MSCI USA ESG Optimized ETF

iShares ESG MSCI USA Leaders ETF

iShares ESG Advanced MSCI USA ETF

While 2023 proved to be a challenging year for US sustainable funds including ETFs, the underlying principles of ESG investing remain relevant and are increasingly being incorporated into mainstream investment strategies.

US Sustainable ETFs Face Record Outflows in 2023: Here's Why

Xtrackers S&P ESG Value ETF

General Motors Co. is accelerating its electric vehicle production. In a letter to shareholders, GM CEO Mary Barra wrote that 2023 will be a “breakout year” for the company's electric vehicle business.

Use SNPV & SNPE to Invest in GM's Electric Vehicle Acceleration

Manager Directed Portfolios - iM DBi Managed Futures Strategy ETF

WisdomTree India Earnings Fund

American Century Focused Large Cap Value ETF

SPDR Gold Trust

iShares Core S&P 500 ETF

iShares S&P 500 Growth ETF

SPDR Bloomberg High Yield Bond ETF

KraneShares CSI China Internet ETF

SPDR Portfolio S&P 500 ETF

Invesco S&P 500 Low Volatility ETF

SPDR S&P 500 ETF Trust

T Rowe Price Blue Chip Growth ETF

Vanguard S&P 500 ETF

Technology Select Sector SPDR Fund

On Sunday, a select few of us in the ETF industry will be toasting the 30th anniversary of the SPDR S&P 500 ETF (SPY), the first U.S.-listed and still-largest ETF. However, millions of Americans will unknowingly be among the beneficiaries of the major milestone.

SPY Has Aged Well for 30 Despite So Many Grandkids

Xtrackers S&P 500 Growth ESG ETF

Stocks rallied Tuesday morning after the latest consumer price index revealed inflation to be slowing down. The CPI rose 0.1% in November after increasing 0.4% in October; the index increased 7.1% over the last 12 months.

Target ESG While Stocks Rally

Xtrackers S&P ESG Dividend Aristocrats ETF

DWS has launched three new exchange traded funds that provide exposure to U.S. equity investment styles with ESG-screened U.S. dividend-, growth-, and value-oriented equities.

DWS Launches 3 New Xtrackers ESG Equity Funds

Xtrackers Net Zero Pathway Paris Aligned US Equity ETF

Apple has shown signs of growth and stability not seen in many of its peers. The Cupertino, California-based tech giant on Thursday reported record revenue of $90.1 billion for the quarter ended September 30, and annual sales growth of 8%, beating analyst expectations.

Apple Showing Growth and Stability Over Peers

Environmental, social, and governance investing has become increasingly popular among investors. Data from Refinitiv Lipper show that global ESG funds received a record $649 billion in investor capital in 2021 through November 30, up from $542 billion in 2020 and $285 billion in 2019.

Use Xtrackers' SNPE and SMLE to Target Firms With Strong ESG Credentials

iShares Core S&P Small Cap ETF

Invesco ESG Nasdaq 100 ETF

The supply of environmental, social, and governance (ESG) ETFs, as well as those that offer a counter-narrative to ESG investing, has expanded in 2022, even as the amount of money currently invested in all of these funds remains minimal.

Want to Help Lower Client Bill's Taxes? How About ESG ETFs?

Xtrackers MSCI EAFE ESG Leaders Equity ETF

Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF

Xtrackers MSCI USA ESG Leaders Equity ETF

Despite all the political noise and saber-rattling from some, environmental, social, and governance investing is still growing in popularity among investors. In a study commissioned by Capital Group, 89% of global investors are ESG adopters, up from 84% in 2021.

Despite the Noise, ESG is Gaining in Popularity

The Xtrackers S&P 500 ESG ETF (SNPE) is an ideal core equity product for investors looking to integrate ESG screening into their portfolio. SNPE was the first to offer exposure to S&P 500 stocks screened for environmental, social, and governance factors, according to VettaFi.

Checking Under the Hood of SNPE

Investing in ESGs has taken a controversial turn in recent weeks as some states have taken aim at the sustainable funds.

ESG on the edge: Controversy weighs on sustainable ETFs

Global X S&P 500 Catholic Values ETF

iShares MSCI USA ESG Select ETF

﻿ Todd Rosenbluth, head of research at VettaFi, appeared on ETF Edge to discuss ESG investing along with DWS's Arne Noack, S&P Global's Mona Naqvi, and host Bob Pisani.

ETF Edge: Rosenbluth Dives Deep on ESG Controversy

VettaFi's vice chairman Tom Lydon discussed the XTrackers S&P 500 ESG ETF (SNPE) on this week's “ETF of the Week” podcast with Chuck Jaffe of “Money Life.

ETF of the Week: XTrackers S&P 500 ESG ETF (SNPE)

Environmental, social, and governance investing is going to be DWS' “big area of focus for this year as well as likely the next couple of years to come,” according to Arne Noack, DWS Head of Systemic Investment Solutions for the Americas. “It's the key pillar for our strategy here in the Americas as well as [.

ETF Leaders Powered by the NYSE: DWS' Arne Noack

BAD ETF

SPDR S&P 500 ESG ETF

American Century Sustainable ETF

On the heels of the SEC considering stricter disclosure requirements for ESG ETFs and Tesla being removed from the S&P 500 ESG Index, a panel at Inside ETFs gave some key players in the ETF ecosystem a chance to defend ESG. Defense was needed because Eric Balchunas, senior ETF analyst and moderator of the panel, [.

Live From Inside ETFs: The Truth About ESG

SPDR MSCI ACWI Climate Paris A

SPDR MSCI USA Climate Paris Aligned ETF

iShares PHLX Semiconductor ETF

Energy Select Sector SPDR Fund

Strive Asset Management was the most noticeable newcomer to file for ETFs, while Putnam and T. Rowe Price plan to add to their relatively new lineups.

Newcomers & Industry Stalwarts Among Recent ETF Filers

Elon Musk says it's a political punishment.

S&P Drops Tesla From S&P 500 ESG Index

AXS Astoria Inflation Sensitive ETF

Engine No. 1 Transform 500 ETF

On this week's “ETF Report” hosted on Yahoo Finance, Dave Nadig, Financial Futurist for ETF Trends and ETF Database, appeared live from ETF Exchange, the world's largest ETF conference, held in Miami Beach, FL, to discuss how advisors are leveraging ETFs in an environment of inflation and rising rates. Nadig explains that the dominant concerns [.

Dave Nadig Discusses Investing Amidst Rising Rates, Crypto, and ESG

iShares Global Green Bond ETF

iShares ESG Aware US Aggregate Bond ETF

First Trust EIP Carbon Impact ETF

FlexShares STOXX Global ESG Select Index Fund

Columbia International ESG Equity Income ETF

Invesco Real Assets ESG ETF

Blackrock US Carbon Transition Readiness ETF

NuShares ESG U.S. Aggregate Bond ETF

iShares ESG Aware 1-5 Year USD Corporate Bond ETF

Momentum for the U.S. Responsible Investing industry picked up in January when President Joe Biden signed executive orders to re-enter into the Paris Climate Agreement. In 2021 through October month-end, there were 110 equity and fixed income funds that launched focused on Responsible Investing—71 RI-related ETFs and 39 RI-related mutual funds.

Responsible Investing Making Strides With U.S. Investors, Fund Companies, And Regulators In 2021

iShares ESG USD Corporate Bond ETF

Given the magnitude of the changes we foresee, long-term investors may find opportunities in the technologies and innovations that create renewable energy sources or reduce the carbon intensity of energy production. Net zero is about reducing greenhouse gas emissions so that over time we can achieve an overall balance between emissions produced, and the emissions removed from the overall atmosphere.

Clean And Green Investing For A Low-Carbon Economy

Total AUM for ESG/SRI funds is roughly $537.1 billion - 75% represented by actively managed funds. Actively managed funds make up the majority of AUM for both the equity (68%) and fixed income (94%) universe.

ESG/SRI U.S. Funds Steadily Attract Inflows

Currently, there's no single standard for how ESG information should be analyzed and disclosed. Because of this, investors tend to rely heavily on generalized ESG “scores” provided by a handful of vendors. In order to gain a deeper understanding of ESG-related alpha drivers, investors are increasingly leveraging Big Data and Artificial Intelligence for ESG information collection and analysis. While ESG scores provide a static view, alternative data provides more dimensions of insight.

ESG X Big Data: Solving For The Double Bottom Line

From digital factories to plant-based clothing, climate change investing is much more than just investing in renewable energy, according to the Templeton Global Equity Group.

Climate Change Sectors Heat Up

NEW YORK--(BUSINESS WIRE)--DWS's Xtrackers S&P 500 ESG ETF (NYSE Arca: SNPE), has broken through USD 500 million in assets as investor money continues to move into the product amid rising investor interest in environmental, social and governance (ESG) ETFs. The increasing popularity of the product, which currently registers USD 545 million in assets under management (AUM)1, is driven by investor demand for sustainable solutions to supplement their investment strategy, while also seeking to

Xtrackers S&P 500 ESG ETF Breaks Through USD 500 Million in Assets

ESG investing is becoming very popular; here's why.

News for Xtrackers S&P 500 ESG ETF ETF (SNPE)