Indexing asset management represents a core capability and key pillar of the DWS investment platform. We currently manage 174B USD (as of 12/31/19) globally in index-based strategies through separately managed accounts, ETFs and mutual funds.

Index highlights

Global expertise, comprehensive investment solutions

A key differentiator is our ability to develop innovative investment strategies that leverage our global scale and deep bench of expertise.

Our transparent portfolio management process seeks to consistently deliver benchmark returns. We also seek to optimize returns to offset costs and minimize tracking error.

Our ETF capital markets experts provide pre- and post-trade analysis and competitive primary and secondary market insights. Our buy and sell-side relationships facilitate efficient access to global strategies. Intelligent and timely thought leadership is core to all that we do.

There is no assurrance that investment objectives can be achieved.

Currency hedging is critical to international investing


Anyone investing internationally is effectively making two investments - one in the foreign equity itself and the other in the exchange rate value of that investment. Potentially, international equity gains can be limited — or even become losses — by exchange rate risk.

The good news is that a currency hedging strategy may mitigate this risk. DWS´s currency-hedged solutions are designed to do just that.

International equity investments provide access to two different asset classes: equities and currencies. But unhedged currency comes with significant foreign exchange risk, which can adversely affect investment returns.

Source: Morningstar as of 12/31/19. Rolling difference in annualized 5-year volatility of monthly index returns. Past performance does not guarantee future results.

 

Long vs. Short term cases

 

China equities: Tapping an untapped market
 

China is the world’s second-largest economy and boasts the second largest equity market, but foreign exposure to the Chinese market has been limited. As a leading ETF issue in the China A-share market1, DWS offers U.S. investors direct access to onshore Chinese equities through DWS China A-shares ETFs.2

An economy too big to ignore

  • China is the world’s second largest economy, growing at a rate 2.6 times faster than the United States.
  • China’s economy has grown to almost twelve times its size since 2000, while the U.S. economy roughly doubled.

        Share of global GDP* 2000 vs 2019


                Source: IMF as 3/31/20.
                *Totals may not add up to 100% due to rounding.

DWS offers a full spectrum of China equity ETFs

Strategy Potential benefit
Large and mid cap A-shares
  • Main onshore equity benchmark
  • 300 largest, most liquid A-share companies
A-shares included by MSCI
  • Direct, cost-efficient play on Inclusion
  • Exact names set for benchmark-driven inflows
Small cap A-shares
  • Uniquely small cap
  • Names increasingly eligible for MSCI inclusion
All China equity share class
  • Comprehensive coverage of Chinese equities
  • Broad access to world's 2nd largest stock market

 

1Morningstar, based on net flows as of 4/25/19
2Deutsche Bank, 10/15

Our approach

 

By evaluating each stock carefully on an individual basis using all five factors, we assemble what we believe to be the strongest group of stocks that can work together to generate strong returns over the long run.

Imagine a two-stock portfolio example seeking low volatile, value stocks. If we were to choose the least volatile stock and the cheapest stock of the group, the combination might not be optimal – because historically, cheaper stocks are often more volatile, and low-volatility stocks are often more expensive.

In other words, the strengths of each stock are diluted by the weaknesses of the other. By considering all 5 factors within each stock, we seek to prevent this potential dilution effect when stocks are combined.



There is no assurrance that investment objectives can be achieved.
 

Expertise in high-yield, municipal bond and global/emerging market debt is available in a suite of cost-effective index strategies.

DWS Passive manages around $37bn in fixed income segregated mandates and ETFs as of December 31, 2019
The Passive Institutional Mandates team offers individual passive fixed income solutions within segregated accounts, ETFs and other investment vehicles
With the 4C Quality Weighting Approach and the Yield Plus Concept, DWS Passive offers innovative Strategic Beta strategies for both sovereigns and corporates bonds
Customizations like individual exclusion lists, ESG overlays or currency hedges could be implemented on the index and portfolio level

Innovative solutions to help investors align their portfolios with their values and priorities.

Market opportunity

  • ESG analysis can help quantify risk factors otherwise unaccounted for in the market and potentially improve risk-adjusted returns
  • DWS and the University of Hamburg's report of 2250 academic reveals strong positive results between ESG and corporate financial performance based on asset class and region
  • Investors are seeking to 'climate-proof' their portfolios from a fiduciary perspective
  • Asset owners are becoming increasingly aware and insistent about ESG and value-based investment
     

Solution

 
Negative/ exclusion Exclusion of certain sectors or companies based on specific ESG criteria.
Positive/ best-in-class Investment in sectors, companies or projects selected for positive ESG criteria relative to industry peers.
Thematic investing Targeted investments in companies that derive a specific minimum amount of revenues from environmentally beneficial products and services (i.e. child labor, corporate governance, water supply, climate risk mitigation).

Perspective library