Press Release

ESG Updates to Four SPDR ETFs



SYDNEY, 01 December 2021: State Street Global Advisors, the asset management arm of State Street Corporation (NYSE: STT), today announced enhancements to four of its Australian based SPDR ETFs across Global Real Estate, Emerging Markets, and Developed Markets outside Australia (hedged and unhedged). 

From 1 February 2022, the SPDR® Dow Jones® Global Real Estate Fund (DJRE), the SPDR® S&P® World ex Australia Fund (WXOZ), the SPDR® S&P® World ex Australia Fund (Hedged) (WXHG) and the SPDR® S&P® Emerging Markets Fund (WEMG) will start tracking new indices designed to improve the funds’ environmental, social and governance (ESG) profiles.

The updates are being made in response to investor demand for improved sustainability scores and lower greenhouse gas emissions. 

Australian investors will be able to access an ESG focussed Global Real Estate ETF and a reduced carbon emissions Emerging Markets ETF for the first time. 

The changes aren’t expected to significantly alter the risk/return profile of the funds, and investors will continue to have access to a diverse portfolio of international companies at the same management fee.

The enhancements follow the launch of the SPDR® S&P®/ASX 200 ESG Fund (E200) in 2020.

DJRE will be the first ESG Global Real Estate ETF in Australia. The new index uses the widely followed GRESB assessment of ESG performance, which incorporates energy and water usage, carbon emissions, and leasable area covered by green building certifications.

WEMG will be the first reduced carbon emissions Emerging Markets ETF. Together with the Developed Markets outside Australia (hedged and unhedged) ETFs, they will use carbon data from leading provider S&P Global Trucost to reduce their weighted average carbon intensity. All four funds will exclude securities that fail to pass ESG-focussed screens. 

Head of SPDR ETF Asia Pacific Distribution, Meaghan Victor said the community’s heightened focus on climate change is expected to drive even further demand for ESG investments.

“Investors around the world are increasingly looking to adopt ESG more broadly across their portfolios. They are looking to support the economic transition to net zero carbon emissions, mitigate risk, and express their values and preferences through their investments,” Ms Victor said.

“We were first able to meet the ESG demand with our domestic ESG ETF, E200, which provides a comparable risk/return profile to the S&P/ASX 200 Index but with improved ESG characteristics. 

“With improved data sets and index innovation, we are now able to provide core ESG exposures across more asset classes using ETFs.

“Importantly, these funds will continue to deliver investment characteristics similar to their original benchmarks, which means investors can access improved ESG criteria without compromising their portfolio.”  

“As you would expect from the SPDR ETF range, the new indices have been chosen for their quality, liquidity and transparency. They allow us to continue to provide ETFs that align with investor needs and values. These enhancements will ensure the funds evolve to meet investor preferences for ESG while still focusing on their risk return profile,” Ms Victor said.

These four ETFs were launched in 2013. 

The exchange traded product market continues to accelerate in Australia and ETFs are a popular vehicle for investors looking to broaden their core exposures to incorporate ESG. This year, more than $2 billion was invested into ESG ETFs in Australia.1 

Globally, ESG investing has grown to more than USD $35 trillion2, the equivalent of more than a third of the world’s professionally managed assets. 

About the funds and new indices:

  • The SPDR® Dow Jones® Global Real Estate fund (DJRE) will change its name to the SPDR® Dow Jones® Global Real Estate ESG Fund, and track the Dow Jones Global Select ESG Real Estate Securities Index (RESI) (AUD) accessing global real estate securities with an improved sustainability profile. The management expense ratio (MER) remains unchanged at 0.5 per cent per year. The index uses GRESB’s widely followed real estate ESG assessment, which incorporates energy and water usage, carbon emissions, and leasable area covered by green building certifications, offering a deep, specialised sustainability analysis for real estate companies. It aims to reflect the investment characteristics of conventional real estate benchmarks but with an improved sustainability profile and DJRE will be the first Australian ESG global real estate ETF. 
  • The SPDR® S&P® World ex Australia Fund (WXOZ) will change its name to the SPDR® S&P® World ex Australia Carbon Control Fund, and track the S&P Developed ex-Australia LargeMidCap Carbon Control Index (AUD) accessing Large- and Mid-cap shares in Developed ex-Australia markets with a greatly reduced average carbon intensity and the exclusion of securities that fail to pass ESG-focused screens. The underlying S&P Carbon Control Index is designed to minimise weighted average carbon intensity while maintaining industry, country and diversification features similar to the current benchmark, the S&P Developed Ex Australia LargeMidCap Index (AUD). The MER remains unchanged at 0.3 per cent per year.
  • The SPDR® S&P® World ex Australia (Hedged) Fund (WXHG) will change its name to the SPDR® S&P® World ex Australia Carbon Control (Hedged) Fund, and track the S&P Developed Ex-Australia LargeMidCap Carbon Control AUD Hedged Index accessing Large- and Mid-cap shares in Developed ex-Australia markets, with greatly reduced average carbon intensity, the exclusion of securities that fail to pass ESG-focused screens, and with foreign currency exposures hedged back to AUD. The underlying S&P Carbon Control Index is designed to minimise weighted average carbon intensity while maintaining industry, country and diversification features similar to the current benchmark, the S&P Developed Ex Australia LargeMidCap Index (AUD Hedged). The MER remains unchanged at 0.35 per cent per year. 
  • The SPDR® S&P® Emerging Markets Fund (WEMG) will change its name to the SPDR® S&P® Emerging Markets Carbon Control Fund, and track the S&P Emerging LargeMidCap Carbon Control (AUD) Index accessing Large- and Mid-cap shares in Emerging markets, but with greatly reduced average carbon intensity and the exclusion of securities that fail to pass ESG-focused screens. The underlying S&P Carbon Control Index is designed to minimise weighted average carbon intensity while maintaining industry, country and diversification features similar to the current benchmark, the S&P Emerging LargeMidCap Index (AUD). The MER remains unchanged at 0.65 per cent per year and it will be the first Australian ESG and reduced carbon emissions Emerging Markets ETF.  

State Street Global Advisors launched the first ETFs in Australia in 2001 and is known for its global expertise on the design of quality, liquid and transparent ETFs. State Street Global Advisors holds more than USD $524 billion3 in ESG AUM and has offered ESG investment strategies since 1985. 

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