Lyxor Launches New DAX ESG ETF

    Stockholm (NordSIP) –  Lyxor Asset Management launched a new ETF providing exposure to the 50 best ESG companies on the DAX, in an effort to provide a sustainable alternative to the index tracking the German stock exchange.

    “German investors are increasingly looking for financial instruments that allow them to invest in German stocks with ESG filters,” Arne Scheehl (Pictured), Head of product development at Lyxor ETF, commented. “With our ETF tracking the DAX 50 ESG index, we are offering investors for the first time the opportunity to invest in a German share index using an ESG selection process.”

    The Lyxor 1 DAX 50 ESG UCITS ETF (E909 GY) has listed on Deutsche Börse Xetra in euros. Stocks for this ETF are selected from large- and mid-cap companies as well as from technology companies, linked to the HDAX, MDAX and TecDAX indices, respectively.

    The ETF is built in several steps. First, Lyxor excludes any stocks which Sustainalytics has classified as involved with controversial weapons, tobacco, thermal coal, nuclear power, and military contracts, as well as those that violate UN Global Compact Principles. The remaining companies receive an ESG score based on its management of ESG risks, ESG disclosures, key ESG performance indicators (e.g., carbon intensity) and controversies. Securities are then ranked according to their ESG score, order book value and market capitalization. The ETF then selects the top 50 stocks with a limit of no more than 7% of the overall portfolio going to any specific company.

    The ETF overweights the consumer, telecommunications, industrial, media, and retail sectors while underweighting software and automobile companies and excluding utility companies altogether. The ETF is reconstituted and rebalanced every quarter. It has an expense ratio of 0.23% and is passported to Germany, Austria and Luxembourg.

    “We are very pleased that Lyxor has selected the DAX 50 ESG Index for their new ETF,” said Stephan Flaegel, Global Head of Indices & Benchmarks at Qontigo. “With its robust framework and transparent methodology, the DAX 50 ESG Index is a liquid representation of the German equity market that enhances the sustainable profile of a portfolio.”

    Image Courtesy of Lyxor

    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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