Asset Manager DWS Says All of Its New Funds This Year Will Be ESG

FEBRUARY 2, 2021 ESG INVESTING Asset Manager DWS Says All of Its New Funds This Year Will Be ESG By Leslie P. Norton money and not enough advisor sup- [of DWS employees] is working from port,” Gitterman said. home,” versus about 20% that worked Starting this year, every new invest- Woehrmann said the move is “very in the firm’s Tokyo offices in 2020. ment product by asset manager DWS much supported by client flows.” In “The forecasts of many [are] too opti- will be an environmental, social and 2020, about a third of net new flows mistic and there is more uncertainty governance (ESG) fund, as demand were ESG-related. More than 10% of about how effective the vaccine is. The rises for sustainable investing, DWS DWS’s existing assets are ESG-related, length of this crisis is highly underes- CEO Asoka Woehrmann told Barron’s he said. Woehrmann also notes that timated,’ he said. Nevertheless, “the in an interview. ESG versions of its non-ESG funds liquidity wall will carry next year’s “Sustainability is more than a outperformed their benchmarks by a markets,” he said. “We will see some corporate topic, it’s a society topic and wide margin in 2020. volatility, but at the end of the day, an industry topic,” said Woehrmann. Global assets in DWS’s Xtrackers money has to go places.” “Starting in 2021, all the new product ESG ETFs totaled $6 billion in 2020, DWS recently formed an ESG advi- initiatives will by default be ESG.” up 218% from 2019. The Xtrackers S&P sory board, and is a founding signer of Germany-based DWS Group (DWS. 500 ESG ETF (SNPE), the first S&P the Net Zero Asset Managers initia- Germany) is an independent asset 500 ESG ETF in the U.S., has $400 tive that agrees to support targets for manager with 760 billion euros ($920 million in assets. net-zero greenhouse gas emissions in billion) under management. Deutsche The move comes after DWS restruc- their portfolios. Bank (DB) is the majority owner. tured its New York impact investing BlackRock (BLK), the world’s largest The initiative pertains only to new team, amid concerns that 2020 reve- asset manager, has also said it would funds, not to existing funds. The asset nues would be lower than 2019, due put sustainability at the heart of its manager will honor non-ESG man- to the continuing pandemic. DWS dates if the clients prefer it, Woehr- reports its full-year results this week. investment process. In 2020, a Black- mann said. According to a DWS spokesman: “This Rock survey of clients overseeing $25 DWS follows a move by UBS Group initiative and the changes we made to trillion said that 54% consider sustain- (UBS) last year to recommend sustain- this area of our business aren’t relat- able investing to be fundamental to able investing over traditional invest- ed. We are growing our sustainable investment processes and outcomes, ing to its global clients. Other Europe- investing business globally, and this an driving by respondents in Europe. In an managers are likely to follow, says important area of our strategy going addition, respondents plan to double Jeff Gitterman of Gitterman Wealth forward.” sustainable assets under management Management, an investment advisor Woehrmann is cautious about the in the next five years, from 18% of as- with a large sustainable practice that world economy, saying that he doesn’t sets under management today to 37% owns DWS green bond funds for expect it to return to pre-pandemic lev- on average by 2025. clients. els until 2023 at the earliest, given the In the U.S. today, a third of assets However, U.S. investment managers lockdowns across Europe and infec- is now managed according to sustain- will be slow to adopt such a model. tion rates picking up across Asia. able principles, says U.S. SIF, the trade “There is too much assets tied up in old “In Japan, more or less everyone group for sustainable investment. THE PUBLISHER’S SALE OF THIS REPRINT DOES Not CONSTITUTE OR IMPLY ANY ENdoRSEMENT OR SpoNSORSHIP OF ANY PRODUct, SERVICE, COMPANY OR ORGANIZATION. Custom Reprints 800.843.0008 www.djreprints.com DO NOT EDIT OR ALTER REPRINT/REPRODUCTIONS NOT PERMITTED The article was reprinted with the permission of Barron’s. DWS Distributors, Inc. is not responsible for the content. The opinions and forecasts expressed are those of Barron’s and not necessarily those of DWS Distributors, Inc. All opinions and claims are based upon data at the time of publication of this article February 2, 2021 and may not come to pass. This information is subject to change at any time, based upon economic, market and other conditions and should not be construed as a recommendation. War, terrorism, economic uncertainty, trade disputes, public health crises (including the recent pandemic spread of the novel coronavirus) and related geopolitical events could lead to increased market volatility, disruption to U.S. and world economies and markets and may have significant adverse effects on the fund and its investments. Xtrackers ETFs ("ETFs") are managed by DBX Advisors LLC (the "Adviser"), and distributed by ALPS Distributors, Inc. (“ALPS”). The Adviser is a subsidiary of DWS Group GmbH & Co. KGaA, and is not affiliated with ALPS. This ETF is sub- advised by Harvest Global Investments Limited. Shares are not individually redeemable, and owners of Shares may acquire those Shares from the Fund, or tender such Shares for redemption to the Fund, in Creation Units only. The brand DWS represents DWS Group GmbH & Co. KGaA and any of its subsidiaries such as DWS Distributors, Inc., which offers investment products, or DWS Investment Management Americas, Inc. and RREEF America L.L.C., which offer advisory services. Carefully consider the fund's investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the fund's prospectus, which may be obtained by calling 1-855-DBX- ETFS (1-855-329-3837), or by viewing or downloading a prospectus from www.Xtrackers.com. Read the prospectus carefully before investing. Important risk information Investing involves risk, including the possible loss of principal. Investing in securities that meet ESG criteria may result in the fund forgoing otherwise attractive opportunities, which may result in underperformance when compared to funds that do not consider ESG factors. Stocks may decline in value. Stocks of medium sized companies involve greater risk than securities of larger, more‐established companies. Funds investing in a single industry, country or in a limited geographic region generally are more volatile than more diversified funds. Various factors, including costs, cash flows and security selection, may cause the fund’s (SNPE) performance to differ from that of the index. Performance of the fund may diverge from that of the Underlying Index due to operating expenses, transaction costs, and cash flows, use of sampling strategies or operational inefficiencies. This fund is non‐diversified and can take larger positions in fewer issues, increasing its potential risk. An investment in this fund should be considered only as a supplement to a complete investment program for those investors willing to accept the risks associated with the fund. Please read the prospectus for more information. © 2021 DWS Group GmbH & Co. KGaA. All rights reserved. (2/21) R-081388-1. DBXDBX004802 .

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