What is the DFSE ETF ?
In the world of finance, Exchange-Traded Funds (ETFs) have gained immense popularity due to their ease of access, diversification, and potential for long-term growth. One such ETF, the DFSE (Emerging Markets Sustainability ETF), has caught the attention of investors seeking exposure to emerging markets while incorporating sustainability considerations into their investment decisions. In this article, we will delve into the DFSE ETF, its underlying and exposure, the benefits of investing in this fund, and important considerations before making an investment.
DFSE ETF: Overview
The DFSE ETF is designed to achieve its investment objective by adopting an integrated investment approach. This approach combines research, portfolio design, management, and trading functions to emphasize long-term drivers of expected returns while balancing risk through broad diversification across companies and sectors. The fund primarily invests in companies associated with emerging markets, with a focus on smaller capitalization, lower relative price, and higher profitability companies. The portfolio's composition is also adjusted based on sustainability impact considerations, reflecting the fund's commitment to environmentally and socially responsible investments.
DFSE ETF: Underlying and Exposure
To understand the DFSE ETF's underlying and exposure, it is essential to know its definition of the "Emerging Markets Universe." This universe comprises a market capitalization weighted set of companies in emerging markets, including frontier markets that are authorized for investment by the fund's Investment Committee. The fund achieves its increased exposure to smaller capitalization, lower relative price, and higher profitability companies by decreasing the allocation to larger capitalization, higher relative price, or lower profitability companies in the Emerging Markets Universe.
The DFSE ETF's portfolio management also considers shorter-term drivers of expected returns, such as price momentum and investment characteristics, in order to optimize performance and manage trading costs effectively.
DFSE overlap What is the DFSE ETF ?
DFSE ETF: Benefits to Invest
Investing in the DFSE ETF offers several compelling benefits. Firstly, the fund provides exposure to emerging markets, which can be an attractive opportunity for investors seeking high-growth potential. Secondly, the emphasis on sustainability impact considerations allows investors to align their investments with companies that prioritize environmental, social, and governance (ESG) factors, promoting responsible investing. Additionally, the fund's diversified approach helps spread risk across various companies and sectors, reducing the impact of potential market fluctuations on individual holdings. This diversification can be particularly beneficial in volatile market conditions.
DFSE ETF: Considerations Before Investing
Before considering an investment in the DFSE ETF, it is essential to evaluate personal financial goals, risk tolerance, and investment horizon. ETFs, like any investment, come with inherent risks, and potential investors should be aware of the possibility of both gains and losses.
Furthermore, investors should thoroughly review the fund's prospectus, which provides detailed information about the investment objective, strategy, fees, and expenses. It is also crucial to understand the specific sustainability impact considerations the Advisor uses when selecting and adjusting holdings.
Investors must perform due diligence on the underlying assets and consider consulting with a financial advisor to ensure that the DFSE ETF aligns with their overall investment strategy.
Conclusion:
The DFSE ETF offers investors an opportunity to participate in the growth potential of emerging markets while adhering to sustainable investment principles. By focusing on long-term drivers of expected returns and integrating sustainability impact considerations, this ETF presents an attractive option for socially conscious investors.
Disclaimer: This article is for informational purposes only and does not provide any investment advisory services. Readers are advised to conduct their own research and seek professional financial advice before making any investment decisions.
Sources:
The information provided in this article is based on data and descriptions obtained from the DFSE ETF's prospectus and official sources as of September 2021.
DFSE ETF issuer
DFSE ETF official page
DFSE quote and analysis
Discover the top holdings, correlations, and overlaps of ETFs using our visualization tool.
Our app allows you to build and track your portfolio.
To learn more about the DFSE Dimensional Emerging Markets Sustainability Core 1 ETF, access our dedicated page now.
FAQ
What is the DFSE ETF?
The DFSE ETF, also known as the SmartETFs Smart Transportation & Technology ETF, is an exchange-traded fund that invests in equity securities of domestic or foreign companies involved in smart transportation and related technologies.
What does "Smart Transportation" mean in the context of the DFSE ETF?
Smart Transportation, as defined by the fund's adviser, refers to the integration of modern technologies and business practices in transportation, resulting in safer, cleaner, or connected transportation and smart transportation "as a service." It encompasses companies involved in designing, producing, manufacturing, or distributing products or services that enhance safety, reduce emissions, utilize connectivity, or provide transportation services through application-based hailing or sharing.
What types of companies are included in the DFSE ETF's portfolio?
The DFSE ETF's portfolio includes two main categories of companies: Smart Transportation companies and Technology companies. Smart Transportation companies are involved in developing safer, cleaner, or connected transportation products or services. Technology companies are those that use technology to improve processes, applications, or outcomes, including those related to transportation.
How does the DFSE ETF operate?
The DFSE ETF is actively managed, meaning the fund's adviser selects the holdings based on its research and evaluation process. The fund aims to invest at least 80% of its net assets in Smart Transportation and Technology companies. It may hold approximately 35 positions of equal weight, but the number of holdings may vary over time.
What are the benefits of investing in the DFSE ETF?
Investing in the DFSE ETF offers exposure to companies involved in the innovative field of smart transportation and related technologies. This thematic concept focuses on areas such as autonomous vehicles, electric vehicles, connectivity solutions, and transportation-as-a-service platforms, potentially offering long-term growth opportunities.