Xtrackers

 

Investment Company with Variable Capital

 

Registered office: 49, avenue J.F. Kennedy, L-1855 Luxembourg,

 

R.C.S. Luxembourg B-119.899

 

(the "Company")

 

Important Notice to Shareholders of

 

Xtrackers Stoxx Europe 600 Banks Swap UCITS ETF (ISIN: LU0292103651)

 

Xtrackers Stoxx Europe 600 Basic Resources Swap UCITS ETF (ISIN: LU0292100806)

 

Xtrackers Stoxx Europe 600 Food & Beverage Swap UCITS ETF (ISIN: LU0292105359)

 

Xtrackers Stoxx Europe 600 Health Care Swap UCITS ETF (ISIN: LU0292103222)

 

Xtrackers Stoxx Europe 600 Industrial Goods Swap UCITS ETF (ISIN: LU0292106084)

 

Xtrackers Stoxx Europe 600 Telecommunications Swap UCITS ETF (ISIN: LU0292104030)

 

Xtrackers Stoxx Europe 600 Utilities Swap UCITS ETF (ISIN: LU0292104899)

 

Xtrackers Stoxx Europe 600 Oil & Gas Swap UCITS ETF (ISIN: LU0292101796)

 

Xtrackers Stoxx Europe 600 Technology Swap UCITS ETF (ISIN: LU0292104469)

 

(each a "Sub-Fund" and together the "Sub-Funds")

 

30 July 2021

 

The board of directors of the Company (the "Board of Directors") hereby informs the shareholders of the Sub-Funds (the "Shareholders") that it has resolved to make certain changes to the Sub-Funds, as detailed below (collectively referred to as the "Changes").

 

Capitalised terms not defined herein shall have the same meaning ascribed to them in the most recent version of the prospectus of the Company (the "Prospectus"), unless the context otherwise requires.

 

The Changes in relation to each Sub-Fund will be carried out on a date between 1 September 2021 and 30 November 2021 (each an "Effective Date"). A notice will be published on the website of the Company, www.Xtrackers.com (the "Company's Website"), on or around the relevant Effective Date confirming implementation of the Changes.

 

A) OVERVIEW OF THE CHANGES

 

1) Change of Reference Index and Index Administrator

 

Currently the investment objective of each Sub-Fund is to reflect the performance of indices administered by STOXX Ltd. As from the relevant Effective Date, each Sub-Fund shall reflect the performance of indices administered by MSCI Limited and the current Reference Index for each Sub-Fund (each a "Current Reference Index") shall be replaced with a respective new reference index (each a "New Reference Index") as follows:

 
Sub-Fund name              Current Reference Index    New Reference Index 
Xtrackers Stoxx Europe     STOXX(R) Europe 600 Banks  MSCI Europe Financials 
600 Banks Swap UCITS ETF   Index                      ESG Screened 20-35 
                                                      Select Index 
Xtrackers Stoxx Europe     STOXX(R) Europe 600 Basic  MSCI Europe Materials 
600 Basic Resources Swap   Resources Index            ESG Screened 20-35 
UCITS ETF                                             Select Index 
Xtrackers Stoxx Europe     STOXX(R) Europe 600 Food   MSCI Europe Consumer 
600 Food & Beverage Swap   & Beverage Index           Staples ESG Screened 
UCITS ETF                                             20-35 Select Index 
Xtrackers Stoxx Europe     STOXX(R) Europe 600        MSCI Europe Health Care 
600 Health Care Swap       Health Care Index          ESG Screened 20-35 
UCITS ETF                                             Select Index 
Xtrackers Stoxx Europe     STOXX(R) Europe 600        MSCI Europe Industrials 
600 Industrial Goods Swap  Industrial Goods Index     ESG Screened 20-35 
UCITS ETF                                             Select Index 
Xtrackers Stoxx Europe     STOXX(R) Europe 600        MSCI Europe 
600 Telecommunications     Telecommunications Index   Communication Services 
Swap UCITS ETF                                        ESG Screened 20-35 
                                                      Select Index 
Xtrackers Stoxx Europe     STOXX(R) Europe 600        MSCI Europe Utilities 
600 Utilities Swap UCITS   Utilities Index            ESG Screened 20-35 
ETF                                                   Select Index 
Xtrackers Stoxx Europe     STOXX(R) Europe 600 Oil &  MSCI Europe Energy ESG 
600 Oil & Gas Swap UCITS   Gas Index                  Screened 20-35 Select 
ETF                                                   Index 
Xtrackers Stoxx Europe     STOXX(R) Europe 600        MSCI Europe Information 
600 Technology Swap UCITS  Technology Index           Technology ESG Screened 
ETF                                                   20-35 Select Index 
 

Further details on each Current Reference Index and the respective New Reference Index can be found in Appendix 1 to this notice.

 

Differences between each Current Reference Index and the respective New Reference Index include, but are not limited to, the following:

   1. Sector classification: Each Current Reference Index reflects the 
      performance of leading companies in certain sectors, as per the Industry 
      Classification Benchmark ("ICB") standard, in Western Europe. Each New 
      Reference Index includes large and mid-cap securities across certain 
      developed market countries in Europe, which are classified as belonging 
      to certain sectors, as per the Global Industry Classification Standard 
      (GICS(R)) (as set out in Appendix 1 below). As such, each New Reference 
      Index may contain securities that were not eligible for inclusion in the 
      respective Current Reference Index and conversely may exclude securities 
      that were included in the respective Current Reference Index. 
 
   2. ESG: Each Current Reference Index does not apply environmental, social 
      and governance ("ESG") screens. Each respective New Reference Index 
      applies an ESG screening approach which excludes companies that, amongst 
      others, are associated with controversial, civilian, conventional and 
      nuclear weapons and tobacco, are assigned an MSCI ESG Rating of CCC, 
      derive revenues from thermal coal and oil sands extractions and that are 
      not in compliance with the United Nations Global Compact principles. Each 
      New Reference Index's ESG standards limit the number of securities 
      eligible for inclusion in each New Reference Index. As a result, each New 
      Reference Index, and as such, the relevant Sub-Fund may be more heavily 
      weighted in securities or countries that underperform the market as a 
      whole or underperform other funds screened for ESG standards, or which do 
      not screen for such standards. Each New Reference Index promotes ESG 
      characteristics, therefore each Sub-Fund will qualify as a product 
      subject to Article 8 of SFDR as of the Effective Date. 
 
   3. Weighting: Each Current Reference Index and the respective New Reference 
      Index are market capitalisation weighted. 
 

However, for each Sub-Fund other than Xtrackers Stoxx Europe 600 Oil & Gas Swap UCITS ETF and Xtrackers Stoxx Europe 600 Technology Swap UCITS ETF each New Reference Index aims to avoid concentration by capping entities within the index such that the weight of the largest group entity is capped at 31.5% and the weights of all other entities are capped at 18%, at each quarterly re-balancing (that is 35% and 20% respectively, with a buffer of 10% applied on these limits at each index rebalancing), in accordance with the MSCI Capped Indexes methodology. Owing to the potentially concentrated nature of each New Reference Index, constituents may be subject to additional rebalancing at each month-end on an as-needed basis, as follows; where the weight of the largest group entity has exceeded 35% or any other entities have exceeded 20% in the lead up to each month-end, such entities will be rebalanced to 31.5% and 18% respectively. Each New Reference Index may also be rebalanced at other times in order to reflect corporate activity such as mergers and acquisitions or due to a breach of the capping constraints as set out above.

 

For Xtrackers Stoxx Europe 600 Oil & Gas Swap UCITS ETF and Xtrackers Stoxx Europe 600 Technology Swap UCITS ETF each New Reference Index aims to avoid concentration by capping entities within the index such that the weight of the largest group entity is capped at 28% and the weights of all other entities are capped at 16%, at each quarterly re-balancing (that is 35% and 20% respectively, with a buffer of 20% applied on these limits at each index rebalancing), in accordance with the MSCI Capped Indexes methodology. Owing to the potentially concentrated nature of each New Reference Index, constituents may be subject to additional rebalancing at each month-end on an as-needed basis, as follows; where the weight of the largest group entity has exceeded 35% or any other entities have exceeded 20% in the lead up to each month-end, such entities will be rebalanced to 28% and 16% respectively. Each New Reference Index may also be rebalanced at other times in order to reflect corporate activity such as mergers and acquisitions or due to a breach of the capping constraints as set out above.

 

Each Current Reference Index includes a different capping mechanism to the New Reference Index such that the largest component's weight is capped at 30 percent of each Current Reference Index's total free float market capitalisation and the weight of the second largest component is capped at 15 percent of the Current Reference Index's total free float market capitalisation.

 

Further details on the index methodology of each New Reference Index and information on the Global Industry Classification Standards can be found on https://www.msci.com.

 

The change to each New Reference Index is proposed as part of the Company's continuous review of its existing product range and due to increased demand for ESG compliant investments in the relevant Sub-Fund whilst providing relevant sector exposure. The Board of Directors deems it to be in the best interests of the Shareholders to restructure each Sub-Fund to reflect the New Reference Index. Further details on MSCI ESG Ratings can be found on https://www.msci.com/esg-ratings.

 

2) Change to the Investment Policy

 

The Board of Directors has resolved to switch the investment policy of each of the Sub-Funds from their current Indirect Investment Policy such that, as from the relevant Effective Date, each Sub-Fund will be passively managed in accordance with a Direct Investment Policy and will become a Full Replication Fund. Following the switch to a Direct Investment Policy, the applicable Significant Market will change from Indirect Replication Significant Market to Direct Replication Significant Market.

 

The switch in Investment Policy is proposed due to increased investor demand for direct replication sector ETFs.

 

3) Securities Lending

 

With effect from the respective Effective Date, each Sub-Fund may start engaging in securities lending activities to generate additional income and reduce costs. The proportion of each Sub-Fund's net assets subject to Securities Lending Transactions may vary between 0% and 50%.

 

Where the Sub-Funds enter into Securities Lending Transactions, the collateral received in relation to such transactions shall comply with ESG standards as determined by the relevant Investment Manager, Sub-Portfolio Manager and/or Securities Lending Agent, in accordance with and within the limits set forth in the Agency Securities Lending and Repurchase Agreement and in addition to the criteria defined under the sections "Collateral Arrangements in Respect of Securities Lending Transaction(s)" and "Securities Lending and Repurchase Transactions" of the Prospectus. Collateral conforming to such ESG standards shall be identified by reference to an appropriate developed market ESG equity index, as determined from time to time by the relevant Investment Manager, Sub-Portfolio Manager and/or Securities Lending Agent and will incorporate as a minimum ESG screens substantially similar to those of each New Reference Index. The securities held as collateral in respect to Securities Lending Transactions are available on the website of the Company www.Xtrackers.com.

 

4) Change in Cut-Off Time

 

As from the relevant Effective Date, the applicable Cut-off Time of each Sub-Fund shall be amended from 3:00 p.m. Luxembourg time on the relevant Transaction Day to 3.30 p.m. Luxembourg time on the relevant Transaction Day.

 

5) Change to Sub-Fund name

 

As a result of the changes to the Reference Index, Index Administrator, and Investment Policy, as described above, the name of each Sub-Fund shall change as follows as from the relevant Effective Date:

 
Current Sub-Fund name                   New Sub-Fund name 
Xtrackers Stoxx Europe 600 Banks Swap   Xtrackers MSCI Europe Financials ESG 
UCITS ETF                               Screened UCITS ETF 
Xtrackers Stoxx Europe 600 Basic        Xtrackers MSCI Europe Materials ESG 
Resources Swap UCITS ETF                Screened UCITS ETF 
Xtrackers Stoxx Europe 600 Food &       Xtrackers MSCI Europe Consumer Staples 
Beverage Swap UCITS ETF                 ESG Screened UCITS ETF 
Xtrackers Stoxx Europe 600 Health Care  Xtrackers MSCI Europe Health Care ESG 
Swap UCITS ETF                          Screened UCITS ETF 
Xtrackers Stoxx Europe 600 Industrial   Xtrackers MSCI Europe Industrials ESG 
Goods Swap UCITS ETF                    Screened UCITS ETF 
Xtrackers Stoxx Europe 600              Xtrackers MSCI Europe Communication 
Telecommunications Swap UCITS ETF       Services ESG Screened UCITS ETF 
Xtrackers Stoxx Europe 600 Utilities    Xtrackers MSCI Europe Utilities ESG 
Swap UCITS ETF                          Screened UCITS ETF 
Xtrackers Stoxx Europe 600 Oil & Gas    Xtrackers MSCI Europe Energy ESG 
Swap UCITS ETF                          Screened UCITS ETF 
Xtrackers Stoxx Europe 600 Technology   Xtrackers MSCI Europe Information 
Swap UCITS ETF                          Technology ESG Screened UCITS ETF 
 

B) General Information

 

For the avoidance of doubt, the Sub-Funds' fees will remain unchanged.

 

Shareholders should be aware that material transaction costs and duties may arise as a result of the Changes which will be borne by the relevant Sub-Fund.

 

Shareholders who subscribe for Shares in the relevant Sub-Fund(s) on the primary market and who do not agree with the Changes, are entitled to redeem their Shares in the Sub-Fund(s) in accordance with the Prospectus. Such redemptions shall be free of any Redemption Charge from the date of this notice until 3.00 p.m. (Luxembourg time) on 31 August 2021. Please note that the Company does not charge any redemption fee for the sale of Shares in the secondary market. Orders to sell Shares through a stock exchange can be placed via an authorised intermediary or stockbroker. Shareholders should note that orders in the secondary market may incur costs over which the Company has no control and to which the above exemption on redemption charges does not apply.

 

Copies of the revised Prospectus and the key information document for each Sub-Fund reflecting the Changes will be made available on the Company's Website on or around the Effective Date, and copies thereof may be obtained on request free of charge at the registered office of the Company or at the offices of foreign representatives, once available.

 

Shareholders who have any queries or to whom any of the above is not clear should seek advice from their stockbroker, bank manager, legal advisor, accountant or other independent financial advisor.

 

Depending on the country of tax domicile or residence of the Shareholder the Changes may, for example, lead to a taxable event for the Shareholder. Shareholders are strongly urged to consult their tax advisers as to the tax implications of the Changes, specific to their individual cases.

 

Further information in relation to the Changes may be obtained from the legal entities mentioned under Contact information below, the offices of foreign representatives or by sending an email to Xtrackers@dws.com.

 

Neither the contents of the Company's website nor the contents of any other website accessible from hyperlinks on the Company's website is incorporated into, or forms part of, this announcement.

 

Xtrackers

 

The Board of Directors

 

Contact information

 

Xtrackers

 

49, avenue J.F. Kennedy, L-1855 Luxembourg, Grand Duchy of Luxembourg

 

DWS Investment S.A.

 

2, boulevard Konrad Adenauer, L-1115 Luxembourg, Grand Duchy of Luxembourg

 

Appendix 1

 
Current Sub-Fund    New Sub-Fund   Current Reference   Current Industry    New Reference  New Industry 
name                name           Index / Bloomberg   Classification      Index /        Classification 
                                   Ticker              includes companies  Bloomberg      includes 
                                                       of the following    Ticker         companies of the 
                                                       type (ICB)(1)                      following type 
                                                                                          (GICS(R) )(2) 
Xtrackers Stoxx     Xtrackers      STOXX(R) Europe     Banks               MSCI Europe    Banks, Asset 
Europe 600 Banks    MSCI Europe    600 Banks Index                         Financials     Management & 
Swap UCITS ETF      Financials     (SX7R)                                  ESG Screened   Custody Banks, 
                    ESG Screened                                           20-35 Select   Mortgage REITs 
                    UCITS ETF                                              Index          and insurances 
                                                                           (NE734596) 
Xtrackers Stoxx     Xtrackers      STOXX(R) Europe     Forestry & Paper,   MSCI Europe    Chemicals, 
Europe 600 Basic    MSCI Europe    600 Basic           Industrial Metals   Materials ESG  Forestry & Paper, 
Resources Swap      Materials ESG  Resources Index     and Mining          Screened       Metals and 
UCITS ETF           Screened       (SXPR)                                  20-35 Select   Mining 
                    UCITS ETF                                              Index 
                                                                           (NE734591) 
Xtrackers Stoxx     Xtrackers      STOXX(R) Europe     Brewers,            MSCI Europe    Food and Staples 
Europe 600 Food &   MSCI Europe    600 Food &          Distillers &        Consumer       Retailing, 
Beverage Swap       Consumer       Beverage Index      Vintners, Soft      Staples ESG    Beverage, 
UCITS ETF           Staples ESG    (SX3R)              Drinks, Farming &   Screened       Tobacco, 
                    Screened                           Fishing and Food    20-35 Select   Household 
                    UCITS ETF                          Products            Index          Products and 
                                                                           (NE734594)     Personal 
                                                                                          Products 
Xtrackers Stoxx     Xtrackers      STOXX(R) Europe     Health Care         MSCI Europe    Health Care 
Europe 600 Health   MSCI Europe    600 Health Care     Providers, Medical  Health Care    Equipment & 
Care Swap UCITS     Health Care    Index (SXDR)        Equipment, Medical  ESG Screened   Services, Health 
ETF                 ESG Screened                       Supplies,           20-35 Select   Care Technology, 
                    UCITS ETF                          Biotechnology and   Index          Biotechnology and 
                                                       Pharmaceuticals.    (NE734595)     Pharmaceuticals 
Xtrackers Stoxx     Xtrackers      STOXX(R) Europe     Aerospace,          MSCI Europe    Aerospace, 
Europe 600          MSCI Europe    600 Industrial      Defense,            Industrials    Defense, 
Industrial Goods    Industrials    Goods Index         Containers &        ESG Screened   Electrical 
Swap UCITS ETF      ESG Screened   (SXNR)              Packaging,          20-35 Select   Equipment, 
                    UCITS ETF                          Diversified         Index          Machinery, 
                                                       Industrials,        (NE734592)     Trading Companies 
                                                       Electrical                         and Distributors 
                                                       Components & 
                                                       Equipment, 
                                                       Electronic 
                                                       Equipment, 
                                                       Commercial 
                                                       Vehicles & Trucks, 
                                                       Industrial 
                                                       Machinery, 
                                                       Industrial 
                                                       Transportation and 
                                                       Support Services 
Xtrackers Stoxx     Xtrackers      STOXX(R) Europe     Fixed Line          MSCI Europe    Diversified 
Europe 600          MSCI Europe    600                 Telecommunications  Communication  Telecommunication 
Telecommunications  Communication  Telecommunications  and Mobile          Services ESG   Services, 
Swap UCITS ETF      Services ESG   Index (SXKR)        Telecommunications  Screened       Wireless 
                    Screened                                               20-35 Select   Telecommunication 
                    UCITS ETF                                              Index          Services, Media 
                                                                           (NE734598)     and 
                                                                                          Entertainment 
Xtrackers Stoxx     Xtrackers      STOXX(R) Europe     Electricity, Gas    MSCI Europe    Electric 
Europe 600          MSCI Europe    600 Utilities       Distribution,       Utilities ESG  Utilities, Gas 
Utilities Swap      Utilities ESG  Index (SX6R)        Multiutilities and  Screened       Distribution, 
UCITS ETF           Screened                           Water               20-35 Select   Multiutilities 
                    UCITS ETF                                              Index          and Water 
                                                                           (NE734599)     Utilities 
Xtrackers Stoxx     Xtrackers      STOXX(R) Europe     Exploration &       MSCI Europe    Energy Equipment 
Europe 600 Oil &    MSCI Europe    600 Oil & Gas       Production,         Energy ESG     & Services and 
Gas Swap UCITS      Energy ESG     Index (SXER)        Integrated Oil &    Screened       Oil, Gas & 
ETF                 Screened                           Gas, Oil Equipment  20-35 Select   Consumable Fuels 
                    UCITS ETF                          & Services and      Index 
                                                       Pipelines           (NE734590) 
Xtrackers Stoxx     Xtrackers      STOXX(R) Europe     Computer Services,  MSCI Europe    IT Services, 
Europe 600          MSCI Europe    600 Technology      Internet,           Information    Software, 
Technology Swap     Information    Index (SX8R)        Software, Computer  Technology     Communications 
UCITS ETF           Technology                         Hardware,           ESG Screened   and Electronic 
                    ESG Screened                       Electronic Office   20-35 Select   Equipment, 
                    UCITS ETF                          Equipment,          Index          Technology 
                                                       Semiconductors and  (NE734597)     Hardware and 
                                                       Telecommunications                 Semiconductors & 
                                                       Equipment                          Semiconductor 
                                                                                          Equipment 
 

(1) Further details on the ICB classifications of industries, supersectors, sectors and subsectors can be found on https://www.stoxx.com/document/Resources/Methodology/Sector_Classification_ICB/icb_structure.pdf

 

(2) Further details on the GICS classifications of sectors, industry groups, industries and subindustries can be found on https://www.msci.com/documents/1296102/11185224/GICS+Methodology+2020.pdf/9caadd09-790d-3d60-455b-2a1ed5d1e48c?t=1578405935658

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210730005043/en/

 
    CONTACT: 

Xtrackers

 
    SOURCE: Xtrackers 
Copyright Business Wire 2021 
 

(END) Dow Jones Newswires

July 30, 2021 04:00 ET (08:00 GMT)

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