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Deutsche AM enters ESG corporate bond ETF market

Deutsche Asset Management (Deutsche AM) has created a fixed income ETF to provide investors with environmental, social and corporate governance (ESG)-focused exposure to the euro-denominated corporate bond market.

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db x-trackers II ESG EUR Corporate Bond UCITS ETF (DR) tracks an index of corporate debt filtered to only include companies that meet certain sustainability, social and corporate governance requirements. The fund is a physical replication ETF.

“The provision of environmental, social and corporate governance investment solutions is an essential part of Deutsche Asset Management’s overall offering. More investors are starting to access fixed income exposure using ETFs, so it is important to have ESG-focused bond exposure available in ETF form alongside our existing solutions,” said Petra Pflaum, Deutsche AM’s Chief Investment Officer for Responsible Investments.

The ESG index underlying the ETF – the Bloomberg Barclays MSCI Euro Corporate Sustainable and SRI Index – has similar yield and duration to its non-SRI equivalent, and is over 99% correlated with it [1]. For inclusion in the index bonds have to be investment-grade rated and have an amount outstanding of at least EUR 300 million, as well as meeting sustainability and SRI requirements.

The db x-trackers II ESG EUR Corporate Bond UCITS ETF has an annual All-in Fee of 0.25% and is listed on the Deutsche Börse.

Next Finance , February 2017

Article also available in : English | français

Footnotes

[1] Source: Deutsche AM, January 2017: Bloomberg Barclays MSCI Euro Corporate Sustainable and SRI Index = duration of 5.3 and yield of 0.97%. Bloomberg Barclays Euro Aggregate Corporate Index = duration of 5.4 and yield of 0.98%. Five-year correlation between both indices = 99.8%.

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