DWS Xtrackers has launched three ETFs targeting global and European small-cap equities, including ESG-integrated strategies, giving investors access to a segment often viewed as “innovative but volatile”.
The launch includes a globally diversified small-cap ETF, offered in distributing and accumulating share classes, alongside ESG-screened versions of global and European small-cap strategies.
The launch adds three new ETFs, offered in four share classes. Three of the share classes track the MSCI World Small Cap Index, which comprises around 4,000 companies from 23 developed markets. The index covers about 14% of global free-float market capitalisation, a portion of the investable equity universe not included in the classic MSCI World Index.
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Xtrackers said small-cap indices in Europe and globally offer diversification through stock numbers, capped weights, and varied industry and country exposure, setting them apart from large- and mid-cap benchmarks. Adding small caps can expand an ETF portfolio by thousands of stocks and broaden risk/return over the long term.
“With these new products, we want to offer our investors the opportunity to efficiently expand their core equity portfolio, closing a strategic gap,” said Michael Mohr, global head of Xtrackers products. ‘It is particularly noteworthy that our MSCI World Small Cap ETF is currently the most cost-effective Ucits-listed product in its category.”
“This year, portfolio diversification is more important than ever, especially for institutional investors,’ says Simon Klein, global head of Xtrackers sales at DWS. “Broad small-cap ETFs enable investors to improve the existing risk diversification within traditional equity portfolios in terms of individual stocks, but also in terms of countries and industries.”