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Important Notice to Shareholders of Xtrackers

·15-min read

LONDON, July 30, 2021--(BUSINESS WIRE)--

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 600 Banks Swap UCITS ETF

STOXX® Europe 600 Banks Index

MSCI Europe Financials ESG Screened 20-35 Select Index

Xtrackers Stoxx Europe 600 Basic Resources Swap UCITS ETF

STOXX® Europe 600 Basic Resources Index

MSCI Europe Materials ESG Screened 20-35 Select Index

Xtrackers Stoxx Europe 600 Food & Beverage Swap UCITS ETF

STOXX® Europe 600 Food & Beverage Index

MSCI Europe Consumer Staples ESG Screened 20-35 Select Index

Xtrackers Stoxx Europe 600 Health Care Swap UCITS ETF

STOXX® Europe 600 Health Care Index

MSCI Europe Health Care ESG Screened 20-35 Select Index

Xtrackers Stoxx Europe 600 Industrial Goods Swap UCITS ETF

STOXX® Europe 600 Industrial Goods Index

MSCI Europe Industrials ESG Screened 20-35 Select Index

Xtrackers Stoxx Europe 600 Telecommunications Swap UCITS ETF

STOXX® Europe 600 Telecommunications Index

MSCI Europe Communication Services ESG Screened 20-35 Select Index

Xtrackers Stoxx Europe 600 Utilities Swap UCITS ETF

STOXX® Europe 600 Utilities Index

MSCI Europe Utilities ESG Screened 20-35 Select Index

Xtrackers Stoxx Europe 600 Oil & Gas Swap UCITS ETF

STOXX® Europe 600 Oil & Gas Index

MSCI Europe Energy ESG Screened 20-35 Select Index

Xtrackers Stoxx Europe 600 Technology Swap UCITS ETF

STOXX® Europe 600 Technology Index

MSCI Europe Information Technology ESG Screened 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®) (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 UCITS ETF

Xtrackers MSCI Europe Financials ESG Screened UCITS ETF

Xtrackers Stoxx Europe 600 Basic Resources Swap UCITS ETF

Xtrackers MSCI Europe Materials ESG Screened UCITS ETF

Xtrackers Stoxx Europe 600 Food & Beverage Swap UCITS ETF

Xtrackers MSCI Europe Consumer Staples ESG Screened UCITS ETF

Xtrackers Stoxx Europe 600 Health Care Swap UCITS ETF

Xtrackers MSCI Europe Health Care ESG Screened UCITS ETF

Xtrackers Stoxx Europe 600 Industrial Goods Swap UCITS ETF

Xtrackers MSCI Europe Industrials ESG Screened UCITS ETF

Xtrackers Stoxx Europe 600 Telecommunications Swap UCITS ETF

Xtrackers MSCI Europe Communication Services ESG Screened UCITS ETF

Xtrackers Stoxx Europe 600 Utilities Swap UCITS ETF

Xtrackers MSCI Europe Utilities ESG Screened UCITS ETF

Xtrackers Stoxx Europe 600 Oil & Gas Swap UCITS ETF

Xtrackers MSCI Europe Energy ESG Screened UCITS ETF

Xtrackers Stoxx Europe 600 Technology Swap UCITS ETF

Xtrackers MSCI Europe Information 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 name

New Sub-Fund name

Current Reference Index / Bloomberg Ticker

Current Industry Classification

includes companies of the following type (ICB)1

New Reference Index / Bloomberg Ticker

New Industry Classification includes companies of the following type (GICS®)2

Xtrackers Stoxx Europe 600 Banks Swap UCITS ETF

Xtrackers MSCI Europe Financials ESG Screened UCITS ETF

STOXX® Europe 600 Banks Index (SX7R)

Banks

MSCI Europe Financials ESG Screened 20-35 Select Index (NE734596)

Banks, Asset Management & Custody Banks, Mortgage REITs and insurances

Xtrackers Stoxx Europe 600 Basic Resources Swap UCITS ETF

Xtrackers MSCI Europe Materials ESG Screened UCITS ETF

STOXX® Europe 600 Basic Resources Index (SXPR)

Forestry & Paper, Industrial Metals and Mining

MSCI Europe Materials ESG Screened 20-35 Select Index (NE734591)

Chemicals, Forestry & Paper, Metals and Mining

Xtrackers Stoxx Europe 600 Food & Beverage Swap UCITS ETF

Xtrackers MSCI Europe Consumer Staples ESG Screened UCITS ETF

STOXX® Europe 600 Food & Beverage Index (SX3R)

Brewers, Distillers & Vintners, Soft Drinks, Farming & Fishing and Food Products

MSCI Europe Consumer Staples ESG Screened 20-35 Select Index (NE734594)

Food and Staples Retailing, Beverage, Tobacco, Household Products and Personal Products

Xtrackers Stoxx Europe 600 Health Care Swap UCITS ETF

Xtrackers MSCI Europe Health Care ESG Screened UCITS ETF

STOXX® Europe 600 Health Care Index (SXDR)

Health Care Providers, Medical Equipment, Medical Supplies, Biotechnology and Pharmaceuticals.

MSCI Europe Health Care ESG Screened 20-35 Select Index (NE734595)

Health Care Equipment & Services, Health Care Technology, Biotechnology and Pharmaceuticals

Xtrackers Stoxx Europe 600 Industrial Goods Swap UCITS ETF

Xtrackers MSCI Europe Industrials ESG Screened UCITS ETF

STOXX® Europe 600 Industrial Goods Index (SXNR)

Aerospace, Defense, Containers & Packaging, Diversified Industrials, Electrical Components & Equipment, Electronic Equipment, Commercial Vehicles & Trucks, Industrial Machinery, Industrial Transportation and Support Services

MSCI Europe Industrials ESG Screened 20-35 Select Index (NE734592)

Aerospace, Defense, Electrical Equipment, Machinery, Trading Companies and Distributors

Xtrackers Stoxx Europe 600 Telecommunications Swap UCITS ETF

Xtrackers MSCI Europe Communication Services ESG Screened UCITS ETF

STOXX® Europe 600 Telecommunications Index (SXKR)

Fixed Line Telecommunications and Mobile Telecommunications

MSCI Europe Communication Services ESG Screened 20-35 Select Index (NE734598)

Diversified Telecommunication Services, Wireless Telecommunication Services, Media and Entertainment

Xtrackers Stoxx Europe 600 Utilities Swap UCITS ETF

Xtrackers MSCI Europe Utilities ESG Screened UCITS ETF

STOXX® Europe 600 Utilities Index (SX6R)

Electricity, Gas Distribution, Multiutilities and Water

MSCI Europe Utilities ESG Screened 20-35 Select Index (NE734599)

Electric Utilities, Gas Distribution, Multiutilities and Water Utilities

Xtrackers Stoxx Europe 600 Oil & Gas Swap UCITS ETF

Xtrackers MSCI Europe Energy ESG Screened UCITS ETF

STOXX® Europe 600 Oil & Gas Index (SXER)

Exploration & Production, Integrated Oil & Gas, Oil Equipment & Services and Pipelines

MSCI Europe Energy ESG Screened 20-35 Select Index (NE734590)

Energy Equipment & Services and Oil, Gas & Consumable Fuels

Xtrackers Stoxx Europe 600 Technology Swap UCITS ETF

Xtrackers MSCI Europe Information Technology ESG Screened UCITS ETF

STOXX® Europe 600 Technology Index (SX8R)

Computer Services, Internet, Software, Computer Hardware, Electronic Office Equipment, Semiconductors and Telecommunications Equipment

MSCI Europe Information Technology ESG Screened 20-35 Select Index (NE734597)

IT Services, Software, Communications and Electronic Equipment, Technology Hardware and Semiconductors & 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/20210730005035/en/

Contacts

Xtrackers

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