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- Six questions for Christoph Schmidt: Why the DWS Dynamic Opportunities is now focused on ESG
- The DWS ESG Dynamic Opportunities is now fully compatible with the DWS criteria for sustainable investments.
- ESG investments are now attracting broad investor interest and more and more companies in the investment universe are aligning themselves accordingly.
- The very good long-term performance and a positive Morningstar rating underline the success of the multi-asset fund.
4 minutes to read
Christoph, you have been managing the flagship DWS Dynamic Opportunities since 2013. In the future, the multi-asset fund will be an official ESG product. What has driven this development?
In recent years, we have seen that ESG has become increasingly important for investors. Professional investors in particular are now recognising its decisive advantages. Sustainable investment means the inclusion of ESG criteria in combination with return opportunities that are generally on a par with conventional funds. In addition, ESG stock selection can also minimise risks that some industries face, for example due to climate change. This led us to the decision to switch the DWS Dynamic Opportunities to ESG.
Even before the official decision, a large part of the fund met DWS's internal ESG standards. How did this come about?
I am convinced that ESG will become a core aspect of long-term investment strategies. There is no way back into the niche for sustainability. And because this development ultimately will produce winners and losers, we have started to incorporate sustainability into our analysis and investment process way in the past. This explains why the fund already showed high ESG quality before the changeover and why 95 percent of the portfolio was already compatible with DWS's internal ESG criteria. Why should we withhold the opportunities of sustainable investment from our existing and new customers, who are increasingly focused on the topic?
The fund consists to a large extent of equities. As a fund manager, don't you feel restricted when such a large fund suddenly only invests in ESG-compatible stocks?
These limitations exist, but they are acceptable. The growing appeal of ESG to investors means that more and more companies are realising that it pays to maintain high standards of environmental and social behaviour and corporate governance. This increases their chances of being included in ESG funds. As fund managers, we therefore provide with our selection an impetus for companies to take these aspects seriously. And with more and more sustainably oriented companies, the opportunities to make a truly high-quality ESG selection grow. Our best-in-class approach is based on finding the best company in terms of sustainability within its peer group – so we often find enough alternatives to implement our investment ideas.
Wouldn't it have been possible to launch an ESG variant of the DWS Dynamic Opportunities - as is often the case with other funds?
In the end, a parallel ESG variant of the DWS Dynamic Opportunities would hardly have differed from the "original". As I said, the fund was already characterised by a high ESG quality. Moreover, the fund's essential features and objectives remain the same after conversion. That is why we decided to convert the original right away. The very good long-term performance of the DWS Dynamic Opportunities and its positive ratings from independent assessors such as Morningstar[1] show that sustainable investing is attractive and competitive[2].
For a complete ESG fund, around five percent of the remaining portfolio had to be converted. Who had to leave the DWS Dynamic Opportunities for this?
These were only a handful of individual stocks in total, including companies from the consumer, pharmaceutical and automotive sectors. There were, for example, controversies around workers' rights and environmental aspects that led to companies not being able to meet ESG standards.
Has the changeover changed anything in terms of the target group or the fundamental investment idea behind the DWS Dynamic Opportunities?
Not at all. Its goal is still to achieve equity-like returns with significantly lower fluctuations over the medium term, through a combination of high flexibility and a disciplined risk process. Such a fund profile is certainly also interesting for investors who attach particular importance to sustainability. The target group of the fund has thus definitely broadened even further as a result of the conversion.
Fund facts of the DWS ESG Dynamic Opportunities LD
|
Management Company |
DWS Investment S.A. |
|
Currency |
EUR |
|
ISIN: |
LU1868537090 |
|
Ausgabeaufschlag |
5.0% |
|
Current costs |
1.550% |
|
Earnings |
Accumulation |
|
Total Assets (in Mio.) |
74.58 EUR |
|
Fiscal year |
01.01. – 31.12. |
Risks of the DWS ESG Dynamic Opportunities LD
- Kursrisiko: Der Anteilwert kann jederzeit unter den Preis fallen, zu dem der Anleger die Fondsanteile erworben hat.
- Marktrisiko: Kursverlust von im Fonds gehaltenen Wertpapieren hervorgerufen durch eine allgemeine Marktbewegung.
- Liquiditätsrisiko: Bei Anteilsrückgaben können in bestimmten Marktsituationen im Fonds enthaltene Wertpapiere
und Geldmarktinstrumente eingeschränkt, mit Preisabschlägen oder gar nicht verkäuflich sein. Dies kann negative Auswirkungen auf den Anteilspreis haben. - Bonitätsrisiko: Die Zahlungsfähigkeit des Emittenten eines vom Fonds direkt oder indirekt gehaltenen Wertpapiers
oder Geldmarktinstruments kann sinken. Dies führt in der Regel zu Kursrückgängen des jeweiligen Papiers, die über
die allgemeinen Marktschwankungen hinausgehen. - Ausfallrisiko: Die durch den Investmentfonds genutzten Wertpapiere (Aktien, ggfs. Anleihen und Derivate) unterliegen weder der gesetzlichen noch der freiwilligen Einlagensicherung. Der Fonds verfügt somit über keinen Kapitalschutz.
Das gesamte eingesetzte Kapital ist einem Verlustrisiko bis hin zum Totalverlust ausgesetzt. - Kontrahentenrisiko: Durch den möglichen Einsatz von Derivaten entstehen Kontrahentenrisiken (Bonitätsrisiko des Kontrahenten). Hierunter versteht man die Gefahr einer möglichen, vorübergehenden oder endgültigen Unfähigkeit zur termingerechten Erfüllung von Zins- und/oder Tilgungsverpflichtungen. Der Einsatz von Derivaten kann zu zusätzlichen Verlusten führen.
Performance in the past 12-month periods of the DWS ESG Dynamic Opportunities LD
|
Period |
Net |
Gross |
|
20.01.2020 - 20.01.2021 |
4.56% |
4.56% |
|
20.01.2019 - 20.01.2020 |
16.77% |
16.77% |
|
15.10.2018 - 20.01.2019 |
-6.6% |
-1.93% |
