Last checked at 19 Nov 2021 09:00
Xtrackers II
Investment Company with Variable CapitalRegistered office: 49, avenue J.F. Kennedy, L-1855 Luxembourg,R.C.S. Luxembourg B-124.284(the “Company”)
Important Notice to Shareholders ofXtrackers II Global Aggregate Bond Swap UCITS ETF1D (ISIN: LU0942970103)3D-GBP Hedged (ISIN: LU0942970368)(the “Sub-Fund”)
19 November 2021
Dear Shareholder,
The board of directors of the Company (the "Board of Directors") hereby informs the shareholders of the Sub-Fund (the "Shareholders") that it has resolved to make certain changes to the Sub-Fund, as detailed below (collectively referred to as the “Changes”).
Capitalised terms used in this notice shall have the same meaning ascribed to them in the latest version of the prospectus of the Company (the “Prospectus”), unless the context otherwise requires.
Change of Reference Index
Currently the investment objective of the Sub-Fund is to reflect the performance of the Bloomberg Global Aggregate Bond Index (the “Current Reference Index”). The Current Reference Index reflects the performance of a broad-based measure of the global investment grade fixed-rate debt markets.
On a date between 10 January 2022 and 10 April 2022 (the “Effective Date”), the investment objective of the Sub-Fund will be amended to reflect the performance of the Bloomberg MSCI Global Aggregate Sustainable and SRI Currency Neutral Index (the “New Reference Index”). The New Reference Index is based on the Bloomberg Global Aggregate Index (the "Parent Index") and is intended to reflect the fixed-rate, investment-grade debt market, excluding issuers that do not fulfill specific Environmental, Social and Governance (“ESG”) criteria. Additionally, the New Reference Index is partitioned into segments based on the Parent Index with each segment reflecting a combination of currency, sector and maturity. The weight of each segment is rebalanced monthly to match the segment weight in the Parent Index.
The Current Reference Index does not apply ESG screens. The New Reference Index applies different sets of ESG rules excluding (especially companies): (i) issuers with insufficient MSCI ESG Ratings; (ii) issuers that are involved in business activities that are inconsistent with certain social responsibility criteria as per the MSCI ESG Business Involvement Screening Research methodology, and (iii) issuers that are deemed severely controversial as per the MSCI ESG Controversies methodology. The MSCI ESG Ratings, MSCI ESG Business Involvement Screening Research and MSCI ESG Controversies methodologies are sourced from MSCI ESG Research LLC. The New Reference Index promotes ESG characteristics, therefore the Sub-Fund will qualify as a product subject to Article 8 of SFDR as of the Effective Date.
Further details on the New Reference Index, including its composition, ESG criteria, calculation, rules and methodology can be found on https://www.bloombergindices.com.
The change to the New Reference Index is proposed due to low demand in the Sub-Fund whilst tracking the Current Reference Index. The Board of Directors deems it to be in the best interests of the Shareholders to restructure the Sub-Fund to reflect the New Reference Index.
Change to the Investment Policy
Currently the Sub-Fund is passively managed in accordance with an Indirect Investment Policy. As from the Effective Date, the Sub-Fund will be passively managed in accordance with a Direct Investment Policy and will become an Optimised Replication Fund. To achieve the Investment Objective, the Sub-Fund will attempt to replicate the New Reference Index by buying a portfolio of securities that may comprise the constituents of the New Reference Index, or unrelated transferable securities or other eligible assets (including to-be-announced (TBA) securities and mortgage-backed securities (MBS)).
Currency Hedged Share Class
Currently the Share Class 3D-GBP Hedged (the “Currency Hedged Share Class”) track a currency hedged version of the Current Reference Index. As of the Effective Date, the Currency Hedged Share Class will track the New Reference Index. State Street Bank & Trust Company, London Branch will be appointed as “Currency Hedging Manager” for the Sub-Fund in relation to the Currency Hedged Share Class. The Currency Hedging Manager will seek to hedge the Denomination Currency of the Currency Hedged Share Class against the currency exposures of the constituents in the Sub-Fund’s portfolio which differ to the Denomination Currency of that Currency Hedged Share Class. The Currency Hedging Manager will generally hedge these currency exposures at Share Class level by entering into currency forward exchange contracts or other types of derivative contracts which reflect a foreign exchange hedging exposure. Please refer to section "The Currency Hedged Share Classes" in the main part of the Prospectus for further information.
As of the Effective Date, the anticipated level of Tracking Error disclosed for the Currency Hedged Share Class will represent the anticipated level of Tracking Error of the unhedged Share Class(es) of the Sub-Fund against the New Reference Index
Investment Manager and Sub-Portfolio Managers
Currently the investment manager of the Sub-Fund is DWS Investments UK Limited.
From the Effective Date and in connection with the change from Indirect Investment Policy to Direct Investment Policy (as described above) the Management Company shall sub-delegate the day-to-day investment management with respect to the Sub-Fund to DWS Investment GmbH. DWS Investment GmbH delegates all or part of its investment management responsibilities with respect to the Sub-Fund to DWS Investments UK Limited.
In addition to the delegation to DWS Investments UK Limited as Sub-Portfolio Manager, DWS Investment GmbH may delegate all or part of its investment management responsibilities in relation to those parts of the Sub-Fund’s portfolio that are denominated in certain currencies to DWS Investment Management Americas, Inc. (along with DWS Investments UK Limited a "Sub-Portfolio Manager"). DWS Investments UK Limited will act as Sub-Portfolio Manager in relation to all other parts of the Sub-Fund’s portfolio.
DWS Investment Management Americas, Inc. is a registered investment advisor authorised and regulated by the SEC, having its registered office at 345 Park Avenue, New York, NY 10154, United States of America.
Change to Sub-Fund name
As a result of the changes to the Reference Index and Investment Policy, as described above, the Sub-Fund’s name shall change from “Xtrackers II Global Aggregate Bond Swap UCITS ETF” to “Xtrackers II ESG Global Aggregate Bond UCITS ETF” with effect from the Effective Date.
Securities Lending
With effect from the Effective Date, the Sub-Fund may start engaging in securities lending activities to generate additional income and reduce costs, in accordance with the relevant provisions of the Prospectus.
Where the Sub-Fund enters 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 fixed income 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 the Reference Index. The securities held as collateral in respect to Securities Lending Transactions are available on the website of the Company www.Xtrackers.com.
General Information
For the avoidance of doubt, the Sub-Fund’s 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 Sub-Fund.
Shareholders who subscribe for Shares in the Sub-Fund on the primary market and who do not agree with the Changes, are entitled to redeem their Shares in the Sub-Fund in accordance with the Prospectus. Such redemptions shall be free of any Redemption Charge from the date of this notice until 5.00 p.m. (Luxembourg time) on 20 December 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 documents of the Sub-Fund reflecting the Changes will be made available on the website of the Company (www.Xtrackers.com) 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. Shareholders should also consult their own professional advisors as to the specific tax implications under the laws of the countries of their nationality, residence, domicile or incorporation.
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 II
The Board of Directors
Contact information
Xtrackers II49, avenue J.F. Kennedy, L-1855 Luxembourg, Grand Duchy of LuxembourgDWS Investment S.A.2, boulevard Konrad Adenauer, L-1115 Luxembourg, Grand Duchy of Luxembourg
View source version on businesswire.com: https://www.businesswire.com/news/home/20211119005124/en/
Copyright Business Wire 2021