UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22487
DBX ETF Trust
(Exact name of registrant as specified in charter)
875 Third Avenue
New York, New York 10022
(Address of principal executive offices) (Zip code)
Diane Kenneally
100 Summer Street
Boston, MA 02110
(Name and address of agent for service)
Registrant’s telephone number, including area code: (212) 454-4500
Date of fiscal year end: August 31
Date of reporting period: August 31, 2020
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
August 31, 2020
Annual Report
DBX ETF Trust
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (DEEF)
Xtrackers MSCI Kokusai Equity ETF (KOKU)
Xtrackers Russell 1000 Comprehensive Factor ETF (DEUS)
Xtrackers Russell 1000 US Quality at a Reasonable Price ETF (QARP)
DBX ETF Trust
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| Performance Summary |
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| Schedule of Investments |
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| Board Consideration in Approval of Investment Advisory Contracts |
72 | |||
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To our Shareholders: (Unaudited)
Dear Shareholder,
We are pleased to provide this annual report for four of our equity ETFs for the period ended August 31, 2020.
During the reporting period, the global economy coped with its lowest growth phases on record as the COVID-19 pandemic diverted all funds towards the health crisis, suppressing investment activities. Fiscal measures in the form of relief packages cushioned the fall, ensuring consumption activity, and in some sections, such as equity markets, even sparked an immediate revival. Major central banks, including the Federal Reserve Board, European Central Bank (ECB) and Bank of England, promptly undertook sharp interest rate cuts while continuing their stimulus packages. Furthermore, all revenues from export-driven activities were stalled, and this was a discount on the trade balance, which many nations had to bear.
The U.S. economy was the most affected in terms of the number of COVID-19 cases, and hence, also one of the worst impacted in terms of growth over the review period. Unemployment was at the highest level ever witnessed, which surpassed three times its pre-COVID-19 level; however, as lockdown restrictions were increasingly alleviated, labor data started soothing, but is still at double the rate than the historic lows recorded in September 2019. Interest rates were gradually easing for the first half of the year, before taking a sharp cut, shedding a total of 2% in the wake of the virus. Additionally, the U.S. Federal government emerged steadfast amid the unforeseen entry of the pandemic and issued a sizeable USD2.2 trillion under the CARES Act to anchor economic activity1. Riding on optimistic forecasts, business confidence was high, pushing manufacturing PMIs to their highest levels since January 2019. Elsewhere, trade surplus was lower due to lower exports2. Equity markets recovered and reached new highs despite momentary volatility caused by pandemic-induced fears.
The Eurozone entered into a recession; its Q2 2020 GDP reading was the lowest on record for the region owing to the impact of COVID-19 lockdown on all major sectors, especially industrial production and exports3. In its attempt to truncate the financial risks that the region could face, the ECB sanctioned EUR1.35trn trillion in the form of a Pandemic Emergency Purchase Programme, while keeping interest rates at 0%. Germany, being one of the bloc’s largest economies, was representative of the broader zone’s state, entering into a recession, weighed by lower household spending and fixed investments. France also entered into a recession as its trade deficit increased considerably and government spending receded. Among other regions, the UK too embraced a recession, mostly dragged down by lower private consumption.
The only major economy to avoid a recession and post a positive growth quarter after a lockdown-induced negative quarter was China. The rapid recovery resulted in the largest single quarter growth in the nation’s history. Despite most major economies implied opposition towards the COVID-19 epicenter, both domestic and foreign demand resurged. In contrast, India was one of the major economies that witnessed a steep fall, as it was impacted by a sudden spike in unemployment rates - a shock to its income-generating service sector.
In anticipation of a recovery towards normalcy and growth, administrators around the world are focusing their best efforts on developing an effective vaccine quickly. However, risks include a second wave of COVID-19, resurgence of US-China trade tensions and the divide among regional political opponents pertaining to further relief packages and their composition. Manufacturing activity and business sentiment have shown initial recovery in all regions, which provides optimism to broader investor markets. However, whether markets remain relatively calm, or we witness some episodic volatility, our view is that retaining a diversified factor approach is right. It takes advantage of the relatively uncorrelated nature of their excess returns,
1
and mitigates the need to try and time a particular market cycle. Our team appreciates your trust and looks forward to continue serving your investment needs through innovative index-driven strategies.
Sincerely,
/s/ Freddi Klassen
Freddi Klassen
President and Chief Executive Officer
1 Coronavirus Aid, Relief and Economic Security (CARES) Act.
2 The Manufacturing Purchasing Managers’ Index measures the performance of the manufacturing sector and is derived from a survey of industrial companies.
3 The gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.
Assumptions, estimates and opinions contained in this document constitute our judgment as of the date of the document and are subject to change without notice. Any projections are based on a number of assumptions as to market conditions and there can be no guarantee that any projected results will be achieved. Past performance is not a guarantee of future results.
2
DBX ETF Trust
Xtrackers FTSE Developed Ex US Comprehensive Factor ETF (DEEF)
The Xtrackers FTSE Developed ex-US Comprehensive Factor ETF (DEEF) seeks investment results that correspond generally to the performance, before fees and expenses, of the FTSE Developed ex-US Comprehensive Factor Index (the DEEF Index). The DEEF index is designed to provide exposure to developed international equities (except the United States) based on five factors — value, momentum, quality, low volatility and size. For the 12-month period ended August 31, 2020, DEEF shares returned 7.49%, compared to the DEEF Index return of 7.73%.
The majority of sectors contributed positively to performance with the greatest contribution coming from Industrials, Materials and Financials. Real Estate, Energy and Communication Services were the only negative contributors to performance. From a geographical perspective, Sweden, Japan and United Kingdom were the major positive contributors, while Hong Kong and Singapore contributed negatively to performance.
Xtrackers MSCI Kokusai Equity ETF (KOKU)
The Xtrackers MSCI Kokusai Equity ETF (KOKU) seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI Kokusai Index (the KOKU Index). The KOKU Index is a market capitalization weighted index designed to capture exposure to the large- and mid-cap equity securities in 22 of the 23 developed stock market across the world, excluding Japan. For the period April 8, 2020 (Commencement of Operations) to August 31, 2020, KOKU shares returned 31.66%, compared to the KOKU Index return of 31.48%.
All the sectors contributed positively to performance with greatest contribution coming from Information Technology, Consumer Discretionary and Communication. From a geographical perspective, all the countries contributed positively with greatest contribution coming from United States, Germany and Canada.
Xtrackers Russell 1000 Comprehensive Factor ETF (DEUS)
The Xtrackers Russell 1000 Comprehensive Factor ETF (DEUS) seeks investment results that correspond generally to the performance, before fees and expenses, of the Russell 1000 Comprehensive Factor Index (the DEUS Index). The DEUS index is designed to provide exposure to large-cap United States equities based on five factors — value, momentum, quality, low volatility and size. For the 12-month period ended August 31, 2020, DEUS shares returned 4.93%, compared to the DEUS Index return of 4.94%.
The majority of sectors contributed positively to performance with the greatest contribution coming from Information Technology, Healthcare and Industrials. Financials, Real Estate and Energy were the major negative contributors to performance.
Russell 1000 US Quality at a Reasonable Price ETF (QARP)
The Xtrackers Russell 1000 US Quality at a Reasonable Price ETF (QARP) seeks investment results that correspond generally to the performance, before fees and expenses, of the Russell 1000 2Qual/Val 5% Capped Index. Russell 1000 2Qual/Val 5% Capped Index — a multifactor index designed to capture exposure to large-cap U.S. equities that exhibit strong quality and value factor characteristics. For the 12-month period ended August 31, 2020, QARP shares returned 18.72%, compared to the QARP Index return of 19.09%.
The majority of sectors contributed positively to performance with the greatest contribution coming from Information Technology, Healthcare and Communication Services. Energy and Real Estate were the major negative contributors to performance.
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Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance data visit www.Xtrackers.com. Returns assume that dividends and capital gains distributions have been reinvested. See pages 5-12 of this report for additional performance information, including performance data based on market value.
3
DBX ETF Trust
Management’s Discussion of Fund Performance (Unaudited) (Continued)
The views expressed in this report reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team’s views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Current and future portfolio holdings are subject to risk.
4
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (DEEF)
The Xtrackers FTSE Developed ex US Comprehensive Factor ETF (the “Fund”), using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the FTSE Developed ex US Comprehensive Factor Index (the “Underlying Index”). The Underlying Index is designed to track the equity market performance of companies in developed countries (except the United States) selected on the investment style criteria (“factors”) of value, momentum, quality, low volatility and size. The companies eligible for the Underlying Index are derived from its starting universe, the FTSE Developed ex US Index, which is comprised of large- and mid-capitalization equity securities from developed markets (except the United States). It is not possible to invest directly into an index.
| Performance as of August 31, 2020 | ||||||||
| Average Annual Total Returns | ||||||||
| Net Asset Value | Market Value | FTSE Developed ex US Comprehensive Factor Index |
FTSE Developed ex US Net Tax (US RIC) Index | |||||
| One Year |
7.49% | 6.97% | 7.73% | 7.45% | ||||
| Since Inception1 |
5.39% | 5.24% | 5.96% | 5.42% | ||||
| Cumulative Total Returns | ||||||||
| Net Asset Value | Market Value | FTSE Developed ex US Comprehensive Factor Index |
FTSE Developed ex US Net Tax (US RIC) Index | |||||
| One Year |
7.49% | 6.97% | 7.73% | 7.45% | ||||
| Since Inception1 |
28.48% | 27.60% | 31.85% | 28.64% | ||||
1 Total returns are calculated based on the commencement of operations, November 24, 2015 (“Inception”).
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.Xtrackers.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the sale of fund shares or redemption of fund creation units. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are sold in the market or redeemed. Performance for certain funds may reflect a waiver of a portion of the unitary advisory fee. Without such waiver, performance would have been lower. The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated December 20, 2019, was 0.35%, and may differ from the expense ratio disclosed in the Financial Highlights table in this report.
The Fund’s net asset value or “NAV” is calculated by dividing the value of the Fund’s total assets less total liabilities by the number of shares outstanding. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
5
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (DEEF) (Continued)
* As a percent of total investments excluding securities lending collateral and cash equivalents.
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund’s investment portfolio see page 14.
6
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers MSCI Kokusai Equity ETF (KOKU)
Xtrackers MSCI Kokusai Equity ETF (the “fund”), using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI Kokusai Index (the “Underlying Index”). The MSCI Kokusai Index is also known as the MSCI World ex Japan Index. The Underlying Index is designed to track the performance of equity markets in developed markets (excluding Japan). The MSCI World Index is a free float-adjusted market capitalization index that is designed to measure developed-market equity performance throughout the world. It is not possible to invest directly into an index.
| Performance as of August 31, 2020 | ||||||||
| Cumulative Total Returns | ||||||||
| Net Asset Value | Market Value | MSCI Kokusai Index |
MSCI World Index | |||||
| Since Inception1 |
31.66% | 31.46% | 31.48% | 30.43% | ||||
1 Total returns are calculated based on the commencement of operations, April 8, 2020 (“Inception”).
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.Xtrackers.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the sale of fund shares or redemption of fund creation units. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are sold in the market or redeemed. Performance for certain funds may reflect a waiver of a portion of the unitary advisory fee. Without such waiver, performance would have been lower. The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated January 13, 2020, was 0.09%, and may differ from the expense ratio disclosed in the Financial Highlights table in this report.
The Fund’s net asset value or “NAV” is calculated by dividing the value of the Fund’s total assets less total liabilities by the number of shares outstanding. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
7
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers MSCI Kokusai Equity ETF (KOKU) (Continued)
* As a percent of total investments excluding securities lending collateral and cash equivalents.
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund’s investment portfolio see page 28.
8
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers Russell 1000 Comprehensive Factor ETF (DEUS)
Xtrackers Russell 1000 Comprehensive Factor ETF (the “Fund”), using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the Russell 1000 Comprehensive Factor Index (the “Underlying Index”). The Underlying Index is designed to track the equity market performance of companies in the United States selected on the investment style criteria (“factors”) of value, momentum, quality, low volatility and size. The companies eligible for the Underlying Index are derived from its starting universe, the Russell 1000 Index, which is comprised of large-cap equity securities from issuers in the United States. It is not possible to invest directly into an index.
| Performance as of August 31, 2020 |
| Average Annual Total Returns | ||||||||
| Net Asset Value | Market Value | Russell 1000 Comprehensive Factor Index |
Russell 1000 Index Total Return | |||||
| One Year |
4.93% | 4.96% | 4.94% | 22.50% | ||||
| Since Inception1 |
9.14% | 9.14% | 9.31% | 13.71% | ||||
| Cumulative Total Returns | ||||||||
| Net Asset Value | Market Value | Russell 1000 Comprehensive Factor Index |
Russell 1000 Index Total Return | |||||
| One Year |
4.93% | 4.96% | 4.94% | 22.50% | ||||
| Since Inception1 |
51.83% | 51.82% | 52.99% | 84.72% | ||||
1 Total returns are calculated based on the commencement of operations, November 24, 2015 (“Inception”).
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.Xtrackers.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the sale of fund shares or redemption of fund creation units. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are sold in the market or redeemed. Performance for certain funds may reflect a waiver of a portion of the unitary advisory fee. Without such waiver, performance would have been lower. The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated December 20, 2019, was 0.17%, and may differ from the expense ratio disclosed in the Financial Highlights table in this report.
The Fund’s net asset value or “NAV” is calculated by dividing the value of the Fund’s total assets less total liabilities by the number of shares outstanding. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
9
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers Russell 1000 Comprehensive Factor ETF (DEUS) (Continued)
* As a percent of total investments excluding securities lending collateral and cash equivalents.
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund’s investment portfolio see page 41.
10
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers Russell 1000 US Quality at a Reasonable Price ETF (QARP)
Xtrackers Russell 1000 US Quality at a Reasonable Price ETF (the “Fund”), using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the Russell 1000 2Qual/Val 5% Capped Factor Index (the “Underlying Index”). The Underlying Index is designed to track the equity market performance of companies in the United States selected on the investment style criteria (“factors”) of quality and value. The companies eligible for the Underlying Index are derived from its starting universe, the Russell 1000 Index, which is comprised of large-cap equity securities from issuers in the United States. It is not possible to invest directly into an index.
| Performance as of August 31, 2020 |
| Average Annual Total Returns | ||||||||
| Net Asset Value | Market Value | Russell 1000 2Qual/Val 5% Capped Factor Index |
Russell 1000 Index Total Return | |||||
| One Year |
18.72% | 18.81% | 19.09% | 22.50% | ||||
| Since Inception1 |
11.99% | 11.96% | 12.26% | 14.64% | ||||
| Cumulative Total Returns | ||||||||
| Net Asset Value | Market Value | Russell 1000 2Qual/Val 5% Capped Factor Index |
Russell 1000 Index Total Return | |||||
| One Year |
18.72% | 18.81% | 19.09% | 22.50% | ||||
| Since Inception1 |
31.35% | 31.31% | 32.16% | 39.01% | ||||
1 Total returns are calculated based on the commencement of operations, April 5, 2018 (“Inception”).
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.Xtrackers.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the sale of fund shares or redemption of fund creation units. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are sold in the market or redeemed. Performance for certain funds may reflect a waiver of a portion of the unitary advisory fee. Without such waiver, performance would have been lower. The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated December 20, 2019, was 0.19%, and may differ from the expense ratio disclosed in the Financial Highlights table in this report.
The Fund’s net asset value or “NAV” is calculated by dividing the value of the Fund’s total assets less total liabilities by the number of shares outstanding. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
11
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers Russell 1000 US Quality at a Reasonable Price ETF (QARP) (Continued)
| Ten Largest Equity Holdings as of August 31, 2020 (34.3% of Net Assets) |
| Description | % of Net Assets | |||
| Apple, Inc. |
6.8% | |||
| Alphabet, Inc. |
5.2% | |||
| Facebook, Inc. |
4.3% | |||
| Berkshire Hathaway, Inc. |
4.2% | |||
| Intel Corp. |
3.0% | |||
| Johnson & Johnson |
2.9% | |||
| Visa, Inc. |
2.4% | |||
| Mastercard, Inc. |
2.0% | |||
| Home Depot, Inc. |
1.8% | |||
| Chevron Corp. |
1.7% | |||
* As a percent of total investments excluding securities lending collateral and cash equivalents.
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund’s investment portfolio see page 50.
12
DBX ETF Trust
As a shareholder of one or more of the Funds, you incur two types of costs: (1) transaction costs, including brokerage commissions paid on purchases and sales of fund shares, and (2) ongoing costs, including unitary advisory fees and other Fund expenses. In the most recent six-month period the Funds limited these expenses; had they not done so, expenses would have been higher. The expense examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds.
The examples in the tables are based on an investment of $1,000 invested at the beginning of the period and held for the entire period (March 1, 2020 to August 31, 2020), except Xtrackers MSCI Kokusai Equity ETF which is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (commencement of operations, as noted below, to August 31, 2020).
Actual expenses
The first line in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The second line in the following tables provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses (which is not the Funds’ actual return). The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only, and do not reflect any transactional costs. Therefore the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value March 1, 2020 |
Ending Account Value August 31, 2020 |
Annualized Expense Ratio |
Expenses Paid During the Period Per $1,000(1) |
|||||||||||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
| |||||||||||||||
| Actual |
$ | 1,000.00 | $ | 1,091.80 | 0.24 | % | $ | 1.26 | ||||||||
| Hypothetical (5% return before expenses) |
$ | 1,000.00 | $ | 1,023.93 | 0.24 | % | $ | 1.22 | ||||||||
| Xtrackers MSCI Kokusai Equity ETF |
| |||||||||||||||
| Actual (2) |
$ | 1,000.00 | $ | 1,316.60 | 0.09 | % | $ | 0.42 | ||||||||
| Hypothetical (5% return before expenses) |
$ | 1,000.00 | $ | 1,024.68 | 0.09 | % | $ | 0.46 | ||||||||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
| |||||||||||||||
| Actual |
$ | 1,000.00 | $ | 1,081.60 | 0.17 | % | $ | 0.89 | ||||||||
| Hypothetical (5% return before expenses) |
$ | 1,000.00 | $ | 1,024.28 | 0.17 | % | $ | 0.87 | ||||||||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
| |||||||||||||||
| Actual |
$ | 1,000.00 | $ | 1,172.80 | 0.19 | % | $ | 1.04 | ||||||||
| Hypothetical (5% return before expenses) |
$ | 1,000.00 | $ | 1,024.18 | 0.19 | % | $ | 0.97 | ||||||||
(1) Expenses are equal to each Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 (the number of days in the most recent six-month period), then divided by 366.
(2) Expenses are equal to each Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 146 (the number of days in the period April 8, 2020 (commencement of operations) to August 31, 2020), then divided by 366.
13
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF
August 31, 2020
| See Notes to Financial Statements. | 14 |
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 15 |
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 16 |
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 17 |
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 18 |
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 19 |
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 20 |
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 21 |
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 22 |
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 23 |
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 24 |
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 25 |
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (Continued)
August 31, 2020
A summary of the Fund’s transactions with affiliated investments during the year ended August 31, 2020 is as follows:
| Value ($) at 8/31/2019 |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/(Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital Gain Distributions ($) |
Number of Shares at 8/31/2020 |
Value ($) at 8/31/2020 |
||||||||||||||||||||||||||||
| COMMON STOCKS — 0.0% |
|
|||||||||||||||||||||||||||||||||||
| Germany — 0.0% |
|
|||||||||||||||||||||||||||||||||||
| DWS Group GmbH & Co. KGaA, 144A*(c) |
| |||||||||||||||||||||||||||||||||||
| — | 25,453 | (13,739 | ) | (5,432 | ) | 1,669 | — | — | 202 | 7,951 | ||||||||||||||||||||||||||
| SECURITIES LENDING COLLATERAL — 1.7% |
|
|||||||||||||||||||||||||||||||||||
| DWS Government & Agency Securities Portfolio “DWS Government Cash Institutional Shares”, 0.04% (d)(e) |
| |||||||||||||||||||||||||||||||||||
| 906,421 | 282,480(f | ) | — | — | — | 5,726 | — | 1,188,901 | 1,188,901 | |||||||||||||||||||||||||||
| CASH EQUIVALENTS — 0.0% |
| |||||||||||||||||||||||||||||||||||
| DWS Government Money Market Series “Institutional Shares”, 0.06% (d) |
| |||||||||||||||||||||||||||||||||||
| 27,889 | 5,098,213 | (5,110,830 | ) | — | — | 1,303 | — | 15,272 | 15,272 | |||||||||||||||||||||||||||
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|||||||||||||||||||
| 934,310 | 5,406,146 | (5,124,569 | ) | (5,432 | ) | 1,669 | 7,029 | — | 1,204,375 | 1,212,124 | ||||||||||||||||||||||||||
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| * | Non-income producing security. |
| (a) | Stapled Security — A security contractually bound to one or more other securities to form a single saleable unit which cannot be sold separately. |
| (b) | All or a portion of these securities were on loan. In addition, “Other assets and liabilities, net” may include pending sales that are also on loan. The value of securities loaned at August 31, 2020 amounted to $1,572,218, which is 2.2% of net assets. |
| (c) | Affiliated issuer. This security is owned in proportion with its representation in the index. |
| (d) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (e) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $529,707. |
| (f) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the year ended August 31, 2020. |
| CDI: | Chess Depositary Interest |
| REIT: | Real Estate Investment Trust |
| RSP: | Risparmio (Convertible Savings Shares) |
| 144A: | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
Securities are listed in country of domicile.
At August 31, 2020, open futures contracts purchased were as follows:
| Contract Description |
Currency | Number of Contracts |
Notional Amount |
Contract Value |
Expiration Date |
Unrealized Appreciation |
||||||||||||
| MSCI EAFE Futures |
USD | 4 | $ | 366,800 | $380,020 | 9/18/2020 | $ | 13,220 | ||||||||||
For information on the Fund’s policy and additional disclosures regarding open futures contracts, please refer to the Derivatives section of Note 2 in the accompanying Notes to Financial Statements.
Currency Abbreviations
| USD | U.S. Dollar |
| See Notes to Financial Statements. | 26 |
DBX ETF Trust
Schedule of Investments
Xtrackers FTSE Developed ex US Comprehensive Factor ETF (Continued)
August 31, 2020
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2020 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.
| Assets |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks (g) |
$ | 71,704,804 | $ | – | $ | – | $ | 71,704,804 | ||||||||
| Preferred Stocks (g) |
233,556 | – | – | 233,556 | ||||||||||||
| Rights |
544 | 1,861 | – | 2,405 | ||||||||||||
| Short-Term Investments (g) |
1,204,173 | – | – | 1,204,173 | ||||||||||||
| Derivatives (h) |
||||||||||||||||
| Futures Contracts |
13,220 | – | – | 13,220 | ||||||||||||
|
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|
|
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|
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|
|||||||||
| TOTAL |
$ | 73,156,297 | $ | 1,861 | $ | – | $ | 73,158,158 | ||||||||
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| (g) | See Schedule of Investments for additional detailed categorizations. |
| (h) | Derivatives include unrealized appreciation (depreciation) on open futures contracts. |
| See Notes to Financial Statements. | 27 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Kokusai Equity ETF
August 31, 2020
| See Notes to Financial Statements. | 28 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Kokusai Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 29 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Kokusai Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 30 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Kokusai Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 31 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Kokusai Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 32 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Kokusai Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 33 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Kokusai Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 34 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Kokusai Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 35 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Kokusai Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 36 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Kokusai Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 37 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Kokusai Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 38 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Kokusai Equity ETF (Continued)
August 31, 2020
A summary of the Fund’s transactions with affiliated investments during the period ended August 31, 2020 is as follows:
| Value ($) at 4/8/2020 (Commencement of Operations) |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/(Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital Gain Distributions ($) |
Number of Shares at 8/31/2020 |
Value ($) at 8/31/2020 |
||||||||||||||||||||||||||||||
| COMMON STOCKS — 0.0% |
||||||||||||||||||||||||||||||||||||||
| Germany — 0.0% |
||||||||||||||||||||||||||||||||||||||
| Deutsche Bank AG*(c) |
||||||||||||||||||||||||||||||||||||||
| — | 46,205 | (3,006 | ) | 1,015 | 18,602 | — | — | 6,545 | 62,816 | |||||||||||||||||||||||||||||
| SECURITIES LENDING COLLATERAL — 0.1% |
||||||||||||||||||||||||||||||||||||||
| DWS Government & Agency Securities Portfolio “DWS Government Cash Institutional Shares”, 0.04%(d)(e) |
||||||||||||||||||||||||||||||||||||||
| — | 70,099(f | ) | — | — | — | 19 | — | 70,099 | 70,099 | |||||||||||||||||||||||||||||
| CASH EQUIVALENTS — 0.3% |
||||||||||||||||||||||||||||||||||||||
| DWS Government Money Market Series “Institutional Shares”, 0.06%(d) |
||||||||||||||||||||||||||||||||||||||
| — | 5,748,486 | (5,390,294 | ) | — | — | 178 | — | 358,192 | 358,192 | |||||||||||||||||||||||||||||
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|||||||||||||||||||||
| — | 5,864,790 | (5,393,300 | ) | 1,015 | 18,602 | 197 | — | 434,836 | 491,107 | |||||||||||||||||||||||||||||
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| * | Non-income producing security. |
| (a) | Stapled Security — A security contractually bound to one or more other securities to form a single saleable unit which cannot be sold separately. |
| (b) | All or a portion of these securities were on loan. In addition, “Other assets and liabilities, net” may include pending sales that are also on loan. The value of securities loaned at August 31, 2020 amounted to $575,618, which is 0.4% of net assets. |
| (c) | Affiliated issuer. This security is owned in proportion with its representation in the index. |
| (d) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (e) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $530,595. |
| (f) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the period ended August 31, 2020. |
| See Notes to Financial Statements. | 39 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Kokusai Equity ETF (Continued)
August 31, 2020
| ADR: | American Depositary Receipt |
| CDI: | Chess Depositary Interest |
| REIT: | Real Estate Investment Trust |
| 144A: | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
Securities are listed in country of domicile.
At August 31, 2020, open futures contracts purchased were as follows:
| Contract Description |
Currency | Number of Contracts |
Notional Amount |
Contract Value |
Expiration Date |
Unrealized Appreciation (Depreciation) |
||||||||||||
| E-Mini S&P 500 Futures |
USD | 1 | $ | 154,575 | $ | 174,945 | 9/18/2020 | $ | 20,370 | |||||||||
| MSCI EAFE Futures |
USD | 1 | 95,410 | 95,005 | 9/18/2020 | (405 | ) | |||||||||||
|
|
|
|||||||||||||||||
| Total net unrealized appreciation |
$ | 19,965 | ||||||||||||||||
|
|
|
|||||||||||||||||
For information on the Fund’s policy and additional disclosures regarding open futures contracts, please refer to the Derivatives section of Note 2 in the accompanying Notes to Financial Statements.
Currency Abbreviations
| USD | U.S. Dollar |
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2020 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.
| Assets |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks(h) |
$ | 131,074,927 | $ | — | $ | — | $ | 131,074,927 | ||||||||
| Preferred Stocks |
243,151 | — | — | 243,151 | ||||||||||||
| Rights |
180 | 701 | — | 881 | ||||||||||||
| Short-Term Investments(h) |
428,291 | — | — | 428,291 | ||||||||||||
| Derivatives(i) |
||||||||||||||||
| Futures Contracts |
20,370 | — | — | 20,370 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL |
$ | 131,766,919 | $ | 701 | $ | — | $ | 131,767,620 | ||||||||
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|
|||||||||
| Liabilities |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Derivatives(i) |
||||||||||||||||
| Futures Contracts |
$ | (405 | ) | $ | — | $ | — | $ | (405 | ) | ||||||
|
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|
|
|
|
|
|||||||||
| TOTAL |
$ | (405 | ) | $ | — | $ | — | $ | (405 | ) | ||||||
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|
|
|||||||||
| (h) | See Schedule of Investments for additional detailed categorizations. |
| (i) | Derivatives include unrealized appreciation (depreciation) on open futures contracts. |
| See Notes to Financial Statements. | 40 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 Comprehensive Factor ETF
August 31, 2020
| See Notes to Financial Statements. | 41 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 42 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 43 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 44 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 45 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 46 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 47 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 Comprehensive Factor ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 48 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 Comprehensive Factor ETF (Continued)
August 31, 2020
A summary of the Fund’s transactions with affiliated investments during the year ended August 31, 2020 is as follows:
| Value ($) at 8/31/2019 |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/(Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital Gain Distributions ($) |
Number of Shares at 8/31/2020 |
Value ($) at 8/31/2020 |
||||||||||||||||||||||||||||
| SECURITIES LENDING COLLATERAL — 0.0% |
|
|||||||||||||||||||||||||||||||||||
| DWS Government & Agency Securities Portfolio “DWS Government Cash Institutional Shares”, 0.04% (b)(c) |
| |||||||||||||||||||||||||||||||||||
| 35,815 | 14,810(d | ) | — | — | — | 1,081 | — | 50,625 | 50,625 | |||||||||||||||||||||||||||
| CASH EQUIVALENTS — 1.0% |
| |||||||||||||||||||||||||||||||||||
| DWS Government Money Market Series “Institutional Shares”, 0.06% (b) |
| |||||||||||||||||||||||||||||||||||
| 1,501,074 | 7,478,988 | (7,481,964 | ) | — | — | 17,328 | — | 1,498,098 | 1,498,098 | |||||||||||||||||||||||||||
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| 1,536,889 | 7,493,798 | (7,481,964 | ) | — | — | 18,409 | — | 1,548,723 | 1,548,723 | |||||||||||||||||||||||||||
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|||||||||||||||||||
| * | Non-income producing security. |
| (a) | All or a portion of these securities were on loan. In addition, “Other assets and liabilities, net” may include pending sales that are also on loan. The value of securities loaned at August 31, 2020 amounted to $3,558,109, which is 2.4% of net assets. |
| (b) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (c) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $3,646,279. |
| (d) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the year ended August 31, 2020. |
| REIT: | Real Estate Investment Trust |
At August 31, 2020, open futures contracts purchased were as follows:
| Contract Description |
Currency | Number of Contracts |
Notional Amount |
Contract Value |
Expiration Date |
Unrealized Appreciation |
||||||||||||
| E-Mini S&P 500 Futures |
USD | 3 | $ | 480,300 | $ | 524,835 | 9/18/2020 | $ | 44,535 | |||||||||
| E-Mini S&P MidCap 400 Futures |
USD | 5 | 898,083 | 962,900 | 9/18/2020 | 64,817 | ||||||||||||
|
|
|
|||||||||||||||||
| Total unrealized appreciation |
$ | 109,352 | ||||||||||||||||
|
|
|
|||||||||||||||||
For information on the Fund’s policy and additional disclosures regarding open futures contracts, please refer to the Derivatives section of Note 2 in the accompanying Notes to Financial Statements.
Currency Abbreviations
| USD | U.S. Dollar |
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2020 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.
| Assets |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks (e) |
$ | 148,026,959 | $ | — | $ | — | $ | 148,026,959 | ||||||||
| Short-Term Investments (e) |
1,548,723 | — | — | 1,548,723 | ||||||||||||
| Derivatives (f) |
||||||||||||||||
| Futures Contracts |
109,352 | — | — | 109,352 | ||||||||||||
|
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|
|||||||||
| TOTAL |
$ | 149,685,034 | $ | — | $ | — | $ | 149,685,034 | ||||||||
|
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|
|||||||||
| (e) | See Schedule of Investments for additional detailed categorizations. |
| (f) | Derivatives include unrealized appreciation (depreciation) on open futures contracts. |
| See Notes to Financial Statements. | 49 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 US Quality at a Reasonable Price ETF
August 31, 2019
| See Notes to Financial Statements. | 50 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 US Quality at a Reasonable Price ETF (Continued)
August 31, 2019
| See Notes to Financial Statements. | 51 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 US Quality at a Reasonable Price ETF (Continued)
August 31, 2019
| See Notes to Financial Statements. | 52 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 US Quality at a Reasonable Price ETF (Continued)
August 31, 2019
A summary of the Fund’s transactions with affiliated investments during the year ended August 31, 2020 is as follows:
| Value ($) at 8/31/2019 |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/(Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital Gain Distributions ($) |
Number of Shares at 8/31/2020 |
Value ($) at 8/31/2020 |
||||||||||||||||||||||||||||
| SECURITIES LENDING COLLATERAL — 0.0% |
|
|||||||||||||||||||||||||||||||||||
| DWS Government & Agency Securities Portfolio “DWS Government Cash Institutional Shares”, 0.04%(b)(c) |
| |||||||||||||||||||||||||||||||||||
| — | 37,088(d | ) | — | — | — | 356 | — | 37,088 | 37,088 | |||||||||||||||||||||||||||
| CASH EQUIVALENTS — 0.5% |
| |||||||||||||||||||||||||||||||||||
| DWS Government Money Market Series “Institutional Shares”, 0.06%(b) |
| |||||||||||||||||||||||||||||||||||
| 3,716,009 | 3,634,361 | (6,866,997 | ) | — | — | 9,519 | — | 483,373 | 483,373 | |||||||||||||||||||||||||||
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|
|||||||||||||||||||
| 3,716,009 | 3,671,449 | (6,866,997 | ) | — | — | 9,875 | — | 520,461 | 520,461 | |||||||||||||||||||||||||||
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|||||||||||||||||||
| * | Non-income producing security. |
| (a) | All or a portion of these securities were on loan. In addition, “Other assets and liabilities, net” may include pending sales that are also on loan. The value of securities loaned at August 31, 2020 amounted to $1,322,693, which is 1.3% of net assets. |
| (b) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (c) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $1,353,043. |
| (d) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the year ended August 31, 2020. |
| REIT: | Real Estate Investment Trust |
| See Notes to Financial Statements. | 53 |
DBX ETF Trust
Schedule of Investments
Xtrackers Russell 1000 US Quality at a Reasonable Price ETF (Continued)
August 31, 2019
At August 31, 2020, open futures contracts purchased were as follows:
| Contract Description |
Currency | Number of Contracts |
Notional Amount |
Contract Value |
Expiration Date |
Unrealized Appreciation |
||||||||||||
| E-Mini Russell 1000 Index |
USD | 1 | $ | 90,580 | $ | 97,310 | 9/18/2020 | $ | 6,730 | |||||||||
| E-Mini S&P 500 Futures |
USD | 3 | 459,300 | 524,835 | 9/18/2020 | 65,535 | ||||||||||||
|
|
|
|||||||||||||||||
| Total unrealized appreciation |
$ | 72,265 | ||||||||||||||||
|
|
|
|||||||||||||||||
For information on the Fund’s policy and additional disclosures regarding open futures contracts, please refer to the Derivatives section of Note 2 in the accompanying Notes to Financial Statements.
Currency Abbreviations
| USD | U.S. Dollar |
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2020 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.
| Assets |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks(e) |
$ | 99,870,656 | $ | — | $ | — | $ | 99,870,656 | ||||||||
| Short-Term Investments(e) |
520,461 | — | — | 520,461 | ||||||||||||
| Derivatives(f) |
||||||||||||||||
| Futures Contracts |
72,265 | — | — | 72,265 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL |
$ | 100,463,382 | $ | — | $ | — | $ | 100,463,382 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (e) | See Schedule of Investments for additional detailed categorizations. |
| (f) | Derivatives include unrealized appreciation (depreciation) on open futures contracts. |
| See Notes to Financial Statements. | 54 |
DBX ETF Trust
August 31, 2020
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
Xtrackers MSCI Kokusai Equity ETF |
Xtrackers Russell 1000 Comprehensive Factor ETF |
Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
|||||||||||||
| Assets |
||||||||||||||||
| Investment in non-affiliated securities at value |
$ | 71,932,814 | $ | 131,256,143 | $ | 148,026,959 | $ | 99,870,656 | ||||||||
| Investment in affiliated securities at value |
7,951 | 62,816 | — | — | ||||||||||||
| Investment in DWS Government Money Market Series |
15,272 | 358,192 | 1,498,098 | 483,373 | ||||||||||||
| Investment in DWS Government & Agency Securities Portfolio* |
1,188,901 | 70,099 | 50,625 | 37,088 | ||||||||||||
| Cash |
— | — | 26 | — | ||||||||||||
| Foreign currency at value |
145,326 | 140,049 | — | — | ||||||||||||
| Deposit with broker for futures contracts |
35,200 | 20,800 | 103,500 | 42,000 | ||||||||||||
| Receivables: | ||||||||||||||||
| Investment securities sold |
28,337 | 43,757 | — | — | ||||||||||||
| Capital shares |
— | 16,846 | — | — | ||||||||||||
| Variation margin on futures contracts |
— | 30,213 | — | — | ||||||||||||
| Dividends |
193,312 | 215,784 | 231,957 | 188,313 | ||||||||||||
| Securities lending income |
806 | 144 | 569 | 230 | ||||||||||||
| Foreign tax reclaim |
34,872 | 10,630 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total assets |
$ | 73,582,791 | $ | 132,225,473 | $ | 149,911,734 | $ | 100,621,660 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Liabilities |
||||||||||||||||
| Payable upon return of securities loaned |
$ | 1,188,901 | $ | 70,099 | $ | 50,625 | $ | 37,088 | ||||||||
| Payables: | ||||||||||||||||
| Investment securities purchased |
— | 483,247 | — | — | ||||||||||||
| Investment advisory fees |
14,425 | 9,214 | 21,287 | 15,626 | ||||||||||||
| Variation margin on futures contracts |
2,860 | — | 10,825 | 825 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total liabilities |
1,206,186 | 562,560 | 82,737 | 53,539 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Assets, at value |
$ | 72,376,605 | $ | 131,662,913 | $ | 149,828,997 | $ | 100,568,121 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Assets Consist of |
||||||||||||||||
| Paid-in capital |
$ | 76,776,044 | $ | 107,711,432 | $ | 156,789,988 | $ | 90,444,321 | ||||||||
| Distributable earnings (loss) |
(4,399,439 | ) | 23,951,481 | (6,960,991 | ) | 10,123,800 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Assets, at value |
$ | 72,376,605 | $ | 131,662,913 | $ | 149,828,997 | $ | 100,568,121 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Number of Common Shares outstanding |
2,600,001 | 2,000,001 | 4,300,001 | 3,200,001 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Asset Value |
$ | 27.84 | $ | 65.83 | $ | 34.84 | $ | 31.43 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Investment in non-affiliated securities at cost |
$ | 64,640,338 | $ | 108,159,754 | $ | 130,644,460 | $ | 85,181,738 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Investment in affiliated securities at cost |
$ | 6,282 | $ | 44,214 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Value of securities loaned |
$ | 1,572,218 | $ | 575,618 | $ | 3,558,109 | $ | 1,322,693 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Investment in DWS Government Money Market Series at cost |
$ | 15,272 | $ | 358,192 | $ | 1,498,098 | $ | 483,373 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Investment in DWS Government & Agency Securities Portfolio at cost* |
$ | 1,188,901 | $ | 70,099 | $ | 50,625 | $ | 37,088 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-cash collateral for securities on loan |
$ | 529,707 | $ | 530,595 | $ | 3,646,279 | $ | 1,353,043 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Foreign currency at cost |
$ | 141,688 | $ | 136,293 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| * | Represents collateral on securities loaned. |
| See Notes to Financial Statements. | 55 |
DBX ETF Trust
For the Year Ended August 31, 2020
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
Xtrackers MSCI Kokusai Equity ETF(1) |
Xtrackers Russell 1000 Comprehensive Factor ETF |
Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
|||||||||||||
| Investment Income |
||||||||||||||||
| Unaffiliated dividend income* |
$ | 1,868,965 | $ | 799,208 | $ | 3,518,779 | $ | 2,042,257 | ||||||||
| Income distributions from affiliated funds |
1,303 | 178 | 17,328 | 9,519 | ||||||||||||
| Affiliated securities lending income |
5,726 | 19 | 1,081 | 356 | ||||||||||||
| Unaffiliated securities lending income, net of borrower rebates |
5,597 | 1,139 | 21,945 | 6,309 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total investment income |
1,881,591 | 800,544 | 3,559,133 | 2,058,441 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Expenses |
||||||||||||||||
| Investment advisory fees |
252,500 | 33,206 | 300,072 | 191,789 | ||||||||||||
| Other expenses |
57 | — | 57 | 400 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total expenses |
252,557 | 33,206 | 300,129 | 192,189 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Less fees waived (see note 3): |
||||||||||||||||
| Waiver |
(79,472 | ) | (80 | ) | (1,206 | ) | (544 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net expenses |
173,085 | 33,126 | 298,923 | 191,645 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net investment income (loss) |
1,708,506 | 767,418 | 3,260,210 | 1,866,796 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Realized and Unrealized Gain (Loss) |
||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments |
(7,579,967 | ) | 18,917 | (13,271,410 | ) | (4,566,531 | ) | |||||||||
| Investments in affiliates |
(5,393 | ) | 1,015 | — | — | |||||||||||
| In-kind redemptions |
910,775 | 1,199,697 | 12,294,371 | 9,068,919 | ||||||||||||
| In-kind redemptions in affiliates |
(39 | ) | — | — | — | |||||||||||
| Futures contracts |
63,010 | 56,004 | (271,212 | ) | 42,984 | |||||||||||
| Foreign currency transactions |
1,528 | (7,059 | ) | — | — | |||||||||||
| Payments by Affiliates (see note 8) |
— | 26,486 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net realized gain (loss) |
(6,610,086 | ) | 1,295,060 | (1,248,251 | ) | 4,545,372 | ||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
| Investments |
8,932,501 | 23,096,389 | (2,119,955 | ) | 10,901,013 | |||||||||||
| Investments in affiliates |
1,669 | 18,602 | — | — | ||||||||||||
| Futures contracts |
33,440 | 19,965 | 113,997 | 9,957 | ||||||||||||
| Foreign currency translations |
14,100 | 6,004 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net change in unrealized appreciation (depreciation) |
8,981,710 | 23,140,960 | (2,005,958 | ) | 10,910,970 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net realized and unrealized gain (loss) on investments, futures and foreign currency transactions |
2,371,624 | 24,436,020 | (3,254,209 | ) | 15,456,342 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Increase (Decrease) in Net Assets Resulting from Operations |
$ | 4,080,130 | $ | 25,203,438 | $ | 6,001 | $ | 17,323,138 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| * Unaffiliated foreign tax withheld |
$ | 195,268 | $ | 38,484 | $ | 783 | $ | 460 | ||||||||
| (1) | For the period April 8, 2020 (commencement of operations) through August 31, 2020. |
| See Notes to Financial Statements. | 56 |
DBX ETF Trust
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
Xtrackers MSCI Kokusai Equity ETF |
|||||||||||
| Year Ended August 31, 2020 |
Year Ended August 31, 2019 |
For the Period April 8, 2020(1) to August 31, 2020 |
||||||||||
| Increase (Decrease) in Net Assets from Operations |
||||||||||||
| Net investment income (loss) |
$ | 1,708,506 | $ | 2,231,326 | $ | 767,418 | ||||||
| Net realized gain (loss) |
(6,610,086 | ) | (2,782,464 | ) | 1,295,060 | |||||||
| Net change in net unrealized appreciation (depreciation) |
8,981,710 | (1,883,278 | ) | 23,140,960 | ||||||||
|
|
|
|
|
|
|
|||||||
| Net increase (decrease) in net assets resulting from operations |
4,080,130 | (2,434,416 | ) | 25,203,438 | ||||||||
|
|
|
|
|
|
|
|||||||
| Distributions to Shareholders |
(2,471,676 | ) | (2,029,470 | ) | — | |||||||
|
|
|
|
|
|
|
|||||||
| Fund Shares Transactions |
||||||||||||
| Proceeds from shares sold |
13,809,804 | 34,949,614 | 115,024,649 | |||||||||
| Value of shares redeemed |
(15,395,512 | ) | (17,258,305 | ) | (8,565,224 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net increase (decrease) in net assets resulting from fund share transactions |
(1,585,708 | ) | 17,691,309 | 106,459,425 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total net increase (decrease) in Net Assets |
22,746 | 13,227,423 | 131,662,863 | |||||||||
| Net Assets |
||||||||||||
| Beginning of period |
72,353,859 | 59,126,436 | 50 | |||||||||
|
|
|
|
|
|
|
|||||||
| End of period |
$ | 72,376,605 | $ | 72,353,859 | $ | 131,662,913 | ||||||
|
|
|
|
|
|
|
|||||||
| Changes in Shares Outstanding |
||||||||||||
| Shares outstanding, beginning of period |
2,700,001 | 2,050,001 | 1 | |||||||||
| Shares sold |
550,000 | 1,300,000 | 2,150,000 | |||||||||
| Shares redeemed |
(650,000 | ) | (650,000 | ) | (150,000 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Shares outstanding, end of period |
2,600,001 | 2,700,001 | 2,000,001 | |||||||||
|
|
|
|
|
|
|
|||||||
| (1) | Commencement of Operations. |
| See Notes to Financial Statements. | 57 |
DBX ETF Trust
Statements of Changes in Net Assets (Continued)
| Xtrackers Russell 1000 Comprehensive Factor ETF |
Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
|||||||||||||||
| Year Ended August 31, 2020 |
Year Ended August 31, 2019 |
Year Ended August 31, 2020 |
Year Ended August 31, 2019 |
|||||||||||||
| Increase (Decrease) in Net Assets from Operations |
||||||||||||||||
| Net investment income (loss) |
$ | 3,260,210 | $ | 3,286,586 | $ | 1,866,796 | $ | 1,978,165 | ||||||||
| Net realized gain (loss) |
(1,248,251 | ) | (767,812 | ) | 4,545,372 | 4,286,115 | ||||||||||
| Net change in net unrealized appreciation (depreciation) |
(2,005,958 | ) | 2,660,930 | 10,910,970 | (119,010 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in net assets resulting from operations |
6,001 | 5,179,704 | 17,323,138 | 6,145,270 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Distributions to Shareholders |
(3,463,473 | ) | (3,011,382 | ) | (2,168,938 | ) | (1,746,917 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Fund Shares Transactions |
||||||||||||||||
| Proceeds from shares sold |
74,739,642 | 73,507,056 | 24,136,207 | 82,359,575 | ||||||||||||
| Value of shares redeemed |
(124,756,049 | ) | (43,711,180 | ) | (49,740,049 | ) | (37,153,935 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in net assets resulting from fund share transactions |
(50,016,407 | ) | 29,795,876 | (25,603,842 | ) | 45,205,640 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total net increase (decrease) in Net Assets |
(53,473,879 | ) | 31,964,198 | (10,449,642 | ) | 49,603,993 | ||||||||||
| Net Assets |
||||||||||||||||
| Beginning of year |
203,302,876 | 171,338,678 | 111,017,763 | 61,413,770 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| End of year |
$ | 149,828,997 | $ | 203,302,876 | $ | 100,568,121 | $ | 111,017,763 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Changes in Shares Outstanding |
||||||||||||||||
| Shares outstanding, beginning of year |
6,000,001 | 5,050,001 | 4,100,001 | 2,250,001 | ||||||||||||
| Shares sold |
2,250,000 | 2,300,000 | 900,000 | 3,250,000 | ||||||||||||
| Shares redeemed |
(3,950,000 | ) | (1,350,000 | ) | (1,800,000 | ) | (1,400,000 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Shares outstanding, end of year |
4,300,001 | 6,000,001 | 3,200,001 | 4,100,001 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| See Notes to Financial Statements. | 58 |
DBX ETF Trust
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF Selected Per Share Data |
Years Ended August 31, | Period Ended 8/31/2016(a) |
||||||||||||||||||
| 2020 | 2019 | 2018 | 2017 | |||||||||||||||||
| Net Asset Value, beginning of period |
$ | 26.80 | $ | 28.84 | $ | 28.17 | $ | 25.41 | $ | 25.00 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income (loss) from investment operations: | ||||||||||||||||||||
| Net investment income (loss) (b) |
0.62 | 0.83 | 0.77 | 0.54 | 0.52 | |||||||||||||||
| Net realized and unrealized gain (loss) |
1.32 | (2.11 | ) | 0.72 | 3.19 | 0.27 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total from investment operations |
1.94 | (1.28 | ) | 1.49 | 3.73 | 0.79 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Less distributions from: | ||||||||||||||||||||
| Net investment income |
(0.90 | ) | (0.76 | ) | (0.82 | ) | (0.97 | ) | (0.38 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total distributions |
(0.90 | ) | (0.76 | ) | (0.82 | ) | (0.97 | ) | (0.38 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net Asset Value, end of period |
$ | 27.84 | $ | 26.80 | $ | 28.84 | $ | 28.17 | $ | 25.41 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Return (%) |
7.49 | (c) | (4.51 | )(c) | 5.32 | 15.16 | 3.21 | ** | ||||||||||||
| Ratios to Average Net Assets and Supplemental Data |
||||||||||||||||||||
| Net Assets, end of period ($ millions) |
72 | 72 | 59 | 15 | 3 | |||||||||||||||
| Ratio of expenses before fee waiver (%) |
0.35 | 0.35 | 0.35 | 0.35 | 0.36 | * | ||||||||||||||
| Ratio of expenses after fee waiver (%) |
0.24 | 0.29 | 0.35 | 0.35 | 0.36 | * | ||||||||||||||
| Ratio of net investment income (loss) (%) |
2.37 | 3.05 | 2.62 | 2.10 | 2.77 | * | ||||||||||||||
| Portfolio turnover rate (%) (d) |
43 | 51 | 45 | 45 | 35 | ** | ||||||||||||||
| Xtrackers MSCI Kokusai Equity ETF Selected Per Share Data |
Period Ended 8/31/2020(e) |
|||||||||||||||||||
| Net Asset Value, beginning of period |
$ | 50.00 | ||||||||||||||||||
|
|
|
|||||||||||||||||||
| Income (loss) from investment operations: | ||||||||||||||||||||
| Net investment income (loss) (b) |
0.49 | |||||||||||||||||||
| Net realized and unrealized gain (loss) |
15.34 | |||||||||||||||||||
|
|
|
|||||||||||||||||||
| Total from investment operations |
15.83 | |||||||||||||||||||
|
|
|
|||||||||||||||||||
| Net Asset Value, end of period |
$ | 65.83 | ||||||||||||||||||
|
|
|
|||||||||||||||||||
| Total Return (%) (c) |
31.66 | ** | ||||||||||||||||||
| Ratios to Average Net Assets and Supplemental Data |
||||||||||||||||||||
| Net Assets, end of period ($ millions) |
132 | |||||||||||||||||||
| Ratio of expenses before fee waiver (%) |
0.09 | * | ||||||||||||||||||
| Ratio of expenses after fee waiver (%) |
0.09 | * | ||||||||||||||||||
| Ratio of net investment income (loss) (%) |
2.08 | * | ||||||||||||||||||
| Portfolio turnover rate (%)(d) |
7 | ** | ||||||||||||||||||
| (a) | For the period November 24, 2015 (commencement of operations) through August 31, 2016. |
| (b) | Based on average shares outstanding during the period. |
| (c) | Total Return would have been lower if certain expenses had not been reimbursed by the Advisor. |
| (d) | Portfolio turnover rate does not include securities received or delivered from processing creations or redemptions. |
| (e) | For the period April 8, 2020 (commencement of operations) through August 31, 2020. |
| * | Annualized. |
| ** | Not Annualized. |
| See Notes to Financial Statements. | 59 |
DBX ETF Trust
Financial Highlights (Continued)
| Xtrackers Russell 1000 Comprehensive Factor ETF Selected Per Share Data |
Years Ended August 31, | Period Ended 8/31/2016(a) |
||||||||||||||||||
| 2020 | 2019 | 2018 | 2017 | |||||||||||||||||
| Net Asset Value, beginning of period |
$ | 33.88 | $ | 33.93 | $ | 29.47 | $ | 26.76 | $ | 25.00 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income (loss) from investment operations: | ||||||||||||||||||||
| Net investment income (loss)(b) |
0.62 | 0.57 | 0.52 | 0.51 | 0.40 | |||||||||||||||
| Net realized and unrealized gain (loss) |
0.96 | (c) | (0.09 | )(c) | 4.44 | 2.85 | 1.60 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total from investment operations |
1.58 | 0.48 | 4.96 | 3.36 | 2.00 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Less distributions from: | ||||||||||||||||||||
| Net investment income |
(0.62 | ) | (0.53 | ) | (0.50 | ) | (0.65 | ) | (0.24 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total distributions |
(0.62 | ) | (0.53 | ) | (0.50 | ) | (0.65 | ) | (0.24 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net Asset Value, end of period |
$ | 34.84 | $ | 33.88 | $ | 33.93 | $ | 29.47 | $ | 26.76 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Return (%) |
4.93 | (d) | 1.53 | (d) | 16.97 | (d) | 12.75 | (d) | 8.06 | ** | ||||||||||
| Ratios to Average Net Assets and Supplemental Data |
||||||||||||||||||||
| Net Assets, end of period ($ millions) |
150 | 203 | 171 | 100 | 21 | |||||||||||||||
| Ratio of expenses before fee waiver (%) |
0.17 | 0.17 | 0.19 | 0.23 | 0.25 | * | ||||||||||||||
| Ratio of expenses after fee waiver (%) |
0.17 | 0.17 | 0.18 | 0.21 | 0.25 | * | ||||||||||||||
| Ratio of net investment income (loss) (%) |
1.85 | 1.77 | 1.62 | 1.83 | 2.01 | * | ||||||||||||||
| Portfolio turnover rate (%)(e) |
47 | 48 | 45 | 67 | 64 | ** | ||||||||||||||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF Selected Per Share Data |
Years Ended August 31, |
Period Ended 8/31/2018(f) |
||||||||||||||||||
| 2020 | 2019 | |||||||||||||||||||
| Net Asset Value, beginning of period |
$ | 27.08 | $ | 27.29 | $ | 25.00 | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Income (loss) from investment operations: | ||||||||||||||||||||
| Net investment income (loss)(b) |
0.52 | 0.51 | 0.21 | |||||||||||||||||
| Net realized and unrealized gain (loss) |
4.42 | (0.25 | )(c) | 2.16 | ||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Total from investment operations |
4.94 | 0.26 | 2.37 | |||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Less distributions from: | ||||||||||||||||||||
| Net investment income |
(0.59 | ) | (0.47 | ) | (0.08 | ) | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Total distributions |
(0.59 | ) | (0.47 | ) | (0.08 | ) | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Net Asset Value, end of period |
$ | 31.43 | $ | 27.08 | $ | 27.29 | ||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
| Total Return (%) |
18.72 | (d) | 1.03 | (d) | 9.52 | ** | ||||||||||||||
| Ratios to Average Net Assets and Supplemental Data |
||||||||||||||||||||
| Net Assets, end of period ($ millions) |
101 | 111 | 61 | |||||||||||||||||
| Ratio of expenses before fee waiver (%) |
0.19 | 0.19 | 0.19 | * | ||||||||||||||||
| Ratio of expenses after fee waiver (%) |
0.19 | 0.19 | 0.19 | * | ||||||||||||||||
| Ratio of net investment income (loss) (%) |
1.85 | 1.93 | 2.00 | * | ||||||||||||||||
| Portfolio turnover rate (%)(e) |
22 | 31 | 26 | ** | ||||||||||||||||
| (a) | For the period November 24, 2015 (commencement of operations) through August 31, 2016. |
| (b) | Based on average shares outstanding during the period. |
| (c) | Because of the timing of subscriptions and redemptions in relation to fluctuating markets at value, the amount shown may not agree with the change in aggregate gains and losses. |
| (d) | Total Return would have been lower if certain expenses had not been reimbursed by the Advisor. |
| (e) | Portfolio turnover rate does not include securities received or delivered from processing creations or redemptions. |
| (f) | For the period April 5, 2018 (commencement of operations) through August 31, 2018. |
| * | Annualized. |
| ** | Not Annualized. |
| See Notes to Financial Statements. | 60 |
DBX ETF Trust
1. Organization
DBX ETF Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end registered management investment company organized as a Delaware statutory trust.
As of August 31, 2020, the Trust consists of thirty-three investment series of exchange-traded funds (“ETFs”) (each a “Fund” and collectively, the “Funds”) in operation and trading. These financial statements report on the Funds listed below:
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
| Xtrackers MSCI Kokusai Equity ETF |
| Xtrackers Russell 1000 Comprehensive Factor ETF |
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
DBX Advisors LLC (“DBX” or the “Advisor”), an indirect, wholly-owned subsidiary of DWS Group GmbH & Co. KGaA (“DWS Group”), serves as investment advisor to the Funds and has overall responsibility for the general management and administration of the Funds, subject to the supervision of the Funds’ Board of Trustees (“Board”).
Each Fund offers shares that are listed and traded on the NYSE Arca, Inc. (“NYSE Arca”). Unlike conventional mutual funds, each Fund issues and redeems shares on a continuous basis, at net asset value (“NAV”), only in large specified lots consisting of 50,000 shares, each called a “Creation Unit”, to authorized participants who have entered into agreements with the Funds’ distributor. Shares are not individually redeemable securities of the Funds, and owners of the shares may acquire those shares from the Funds, or tender such shares for redemption to the Funds, in Creation Units only.
The investment objective of each Fund is to track the performance, before fees and expenses, of a particular index (the “Underlying Index”). The underlying indices for the Funds are:
| Fund |
Underlying Index | |
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF | FTSE Developed ex US Comprehensive Factor Index | |
| Xtrackers MSCI Kokusai Equity ETF | MSCI Kokusai Index | |
| Xtrackers Russell 1000 Comprehensive Factor ETF Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
Russell 1000 Comprehensive Factor Index Russell 1000 2Qual/Val 5% Capped Factor Index |
The FTSE Developed ex US Comprehensive Factor Index is designed to track the equity market performance of companies in developed countries (except the United States) selected on the investment style criteria (“factors”) of value, momentum, quality, low volatility and size. The companies eligible for the Underlying Index are derived from its starting universe, the FTSE Developed ex US Index, which is comprised of large- and mid-capitalization equity securities from developed markets (except the United States). The Underlying Index is rebalanced semiannually in March and September after the close of business on the third Friday of the review month.
The MSCI Kokusai Index, also known as the MSCI World ex Japan Index, is designed to track the performance of equity markets in developed markets (excluding Japan). The index is reviewed quarterly in February, May, August and November, with the objective of reflecting change in the underlying equity markets in a timely manner, while limiting undue index turnover. During the May and November semi-annual index reviews, the index is rebalanced and the large and mid capitalization cutoff points are recalculated.
The Russell 1000 Comprehensive Factor Index is designed to track the equity market performance of companies in the United States selected on the investment style criteria (“factors”) of value, momentum, quality, low volatility and size. The companies eligible for the Underlying Index are derived from its starting universe, the Russell 1000 Index, which is comprised of large-cap equity securities from issuers in the United States. The Underlying Index is rebalanced semiannually in June and December after the close of business on the third Friday of the review month.
The Russell 1000 2Qual/Val 5% Capped Factor Index is designed to track the equity market performance of companies in the United States selected on the investment style criteria (“factors”) of quality and value. The companies eligible for the Underlying Index are derived from its starting universe, the Russell 1000 Index, which is comprised of large-cap equity securities from issuers in the United States. The Underlying Index is rebalanced annually in June after the close of business on the third Friday of the review month. Upon a rebalancing, no
61
DBX ETF Trust
Notes to Financial Statements (Continued)
issuer in the Underlying Index may represent more than 5% of the Underlying Index. In the event an issuer represents more than 5% of the Underlying Index at a rebalancing, such amount in excess of 5% shall be reallocated pro-rata to the other issuers in the Underlying Index.
Each Fund is entitled to use its respective Underlying Index pursuant to a licensing agreement between the Index Provider and DBX. There is no charge to the Funds in connection with these licensing agreements.
Each Fund, except Xtrackers MSCI Kokusai Equity ETF and Xtrackers Russell 1000 US Quality at a Reasonable Price ETF is diversified. Xtrackers MSCI Kokusai Equity ETF and Xtrackers Russell 1000 US Quality at a Reasonable Price ETF are non-diversified and is not limited by the Act with regard to the percentage of its assets that may be invested in the securities of a single issuer. This means the securities of a particular issuer (or securities of issuers in particular industries) may dominate the Underlying Index of the Fund and, consequently, the Fund’s investment portfolio. This may adversely affect the Fund’s performance or subject the Fund’s shares to greater price volatility than that experienced by more diversified investment companies. Each Fund may change its diversification status over time and then change it back again, without shareholder approval, solely as a result of a change in relative market capitalization or index weighting of one or more constituents of the index each Fund tracks.
Pursuant to the Trust’s organizational documents, the Trust’s officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business the Trust enters into contracts that contain a variety of representations that provide indemnification for certain liabilities. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Trust expects the risk of loss to be remote.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which require management to make certain estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. Each Fund qualifies as an investment company under Topic 946 of the Accounting Standards Codification of U.S. GAAP. The following is a summary of significant accounting policies followed by the Funds.
Security Valuation The NAV of each Fund’s shares is calculated each business day as of the close of regular trading on the New York Stock Exchange, generally 4:00 p.m. Eastern Time. NAV per share is calculated by dividing a Fund’s net assets by the number of Fund shares outstanding.
Various inputs are used in determining the value of the Funds’ investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
Equity securities and ETFs are valued at the most recent sale price or official closing price reported on the exchange (U.S. or foreign) or over-the-counter market on which they trade. Securities or ETFs for which no sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation. Equity securities and ETFs are generally categorized as Level 1.
Corporate and sovereign debt securities are valued at prices supplied by independent pricing services approved by the Funds’ Board. Such services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. If the pricing services are unable to provide valuations, securities are valued at the mean between the bid and ask quotations or evaluated prices, as applicable, obtained from broker dealers. These securities are generally categorized as Level 2.
Investments in open-end investment companies are valued at their NAV each business day and are categorized as Level 1.
62
DBX ETF Trust
Notes to Financial Statements (Continued)
Futures contracts are generally valued at the settlement prices established each day on the exchange on which they are traded and are categorized as Level 1.
Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Board and are generally categorized as Level 3. In accordance with the Funds’ valuation procedures, factors considered in determining value may include, but are not limited to, the type of the security; the size of the holding; the initial cost of the security; the existence of any contractual restrictions on the security’s disposition; the price and extent of public trading in similar securities of the issuer or of comparable companies; quotations or evaluated prices from broker-dealers and/or pricing services; information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities); an analysis of the company’s or issuer’s financial statements; an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold; and with respect to debt securities, the maturity, coupon, creditworthiness, currency denomination and the movement of the market in which the security is normally traded. The value determined under these procedures may differ from published values for the same securities.
Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s Underlying Index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s Underlying Index.
Disclosure about the classification of the fair value measurements is included in a table following the Fund’s Schedule of Investments.
Cash Cash consists of cash held at banks and is on deposit with major financial institutions.
Investment Transactions and Investment Income Investment transactions are recorded as of the date that the securities are purchased or sold (trade date). Realized gains and losses from the sale or disposition of securities are calculated on the identified cost-method. Dividend income is net of any foreign taxes withheld at source. Certain dividends from foreign securities may be recorded subsequent to the ex-dividend date as soon as the Fund is informed of such dividends. Interest income is recorded on the accrual basis. Distributions received from foreign domiciled corporations, generally determined to be passive foreign investment companies for tax reporting purposes, are included in dividend income.
Tax Information and Dividends and Distributions to Shareholders It is each Fund’s policy to comply with all requirements of the Internal Revenue Code of 1986, as amended (“the Code”). Each Fund intends to qualify for and to elect treatment as a separate Regulated Investment Company (“RIC”) under Subchapter M of the Code. It is the policy of each Fund, except Xtrackers MSCI Kokusai Equity ETF to pay out dividends from its net investment income, if any, to investors quarterly. It is the policy of Xtrackers MSCI Kokusai Equity ETF to pay out dividends from its net investment income, if any, to investors annually. Taxable net realized gains from investment transactions, reduced by capital loss carryforwards, if any, are declared and distributed to shareholders at least annually. The capital loss carryforward amount, if any, is available to offset future net capital gains. The Funds may occasionally be required to make supplemental distributions at some other time during the year. The Funds reserve the right to declare special distributions if, in their reasonable discretion, such action is necessary or advisable to preserve the status of each Fund as a RIC or to avoid imposition of income or excise taxes on undistributed income. Dividends and distributions to shareholders, if any, are recorded on the ex-dividend date. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with Federal income tax regulations which may differ from U.S. GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified at the end of the year within the components of net assets based on their federal tax treatment; temporary differences do not require reclassification. Dividends and distributions, which exceed earnings and profits for the full year for tax purposes, are reported as a tax return of capital.
In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Funds’ tax positions taken or expected to be taken on foreign, federal and state income tax returns for all open tax years and has concluded that no provision for income tax is required in the Funds’ financial statements.
63
DBX ETF Trust
Notes to Financial Statements (Continued)
The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense on the Statements of Operations. For the year ended August 31, 2020, the Funds did not incur any interest or penalties.
As of August 31, 2020, the components of accumulated earnings (losses) on a tax basis were as follows:
| Undistributed Ordinary Income* |
Undistributed Long-Term Capital Gains |
Capital and Other Gains (Losses) |
Unrealized Appreciation (Depreciation) |
Total Accumulated Earnings (Losses) |
||||||||||||||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
$ | 1,052,093 | $ | — | $ | (11,125,767 | ) | $ | 5,674,235 | $ | (4,399,439 | ) | ||||||||
| Xtrackers MSCI Kokusai Equity ETF |
927,367 | 35,128 | — | 22,988,986 | 23,951,481 | |||||||||||||||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
551,729 | — | (22,728,499 | ) | 15,215,779 | (6,960,991 | ) | |||||||||||||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
326,388 | — | (3,502,026 | ) | 13,299,438 | 10,123,800 | ||||||||||||||
The tax character of dividends and distributions declared for the years ended August 31, 2020 and August 31, 2019 were as follows:
| Year Ended August 31, 2020 | ||||
| Ordinary Income* | ||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
$ | 2,471,676 | ||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
3,463,473 | |||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
2,168,938 | |||
| Year Ended August 31, 2019 | ||||
| Ordinary Income* | ||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
$ | 2,029,470 | ||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
3,011,382 | |||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
1,746,917 | |||
| * | For tax purposes short-term capital gain distributions are considered ordinary income distributions. |
At August 31, 2020, for Federal income tax purposes, the Funds have capital loss carryforwards available as shown in the table below, to the extent provided by regulations, to offset future capital gains for an unlimited period. To the extent that these loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to shareholders.
| Short-Term | Long-Term | Total Amount | ||||||||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
$ | 5,483,816 | $ | 5,641,951 | $ | 11,125,767 | ||||||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
14,547,840 | 8,180,659 | 22,728,499 | |||||||||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
769,625 | 2,732,401 | 3,502,026 | |||||||||
For the fiscal year ended August 31, 2020, the effect of permanent “book/tax” reclassifications to the components of net assets are included below. These differences are primarily due to redemptions-in-kind and equalization.
| Distributable earnings (loss) |
Paid-In Capital | |||||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
$ | (618,504 | ) | $ | 618,504 | |||
| Xtrackers MSCI Kokusai Equity ETF |
(1,251,957 | ) | 1,251,957 | |||||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
(10,554,409 | ) | 10,554,409 | |||||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
(8,831,365 | ) | 8,831,365 | |||||
64
DBX ETF Trust
Notes to Financial Statements (Continued)
As of August 31, 2020, the aggregate cost of investments for federal income tax purposes, the net unrealized appreciation or (depreciation) and the aggregated gross unrealized appreciation (depreciation) on investments were as follows:
| Aggregate Tax Cost |
Net Unrealized Appreciation (Depreciation) |
Aggregate Gross Unrealized Appreciation |
Aggregate Gross Unrealized (Depreciation) |
|||||||||||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
$ | 67,481,342 | $ | 5,663,596 | $ | 10,747,138 | $ | (5,083,542 | ) | |||||||
| Xtrackers MSCI Kokusai Equity ETF |
108,764,268 | 22,982,982 | 23,687,907 | (704,925 | ) | |||||||||||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
134,359,903 | 15,215,779 | 20,399,534 | (5,183,755 | ) | |||||||||||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
87,091,679 | 13,299,438 | 19,472,087 | (6,172,649 | ) | |||||||||||
Foreign Taxes The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, capital gains on investments, certain foreign currency transactions or other corporate events. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on capital gains from sales of investments and foreign currency transactions are included in their respective net realized gain (loss) categories, and deferred foreign taxes on unrealized gains are included in net change in unrealized appreciation (depreciation). Receivables and payables related to foreign taxes as of August 31, 2020, if any, are disclosed in the Funds’ Statements of Assets and Liabilities.
Foreign Currency Translations The books and records of the Funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing exchange rates at period end. Purchases and sales of investment securities, income and expenses are translated into U.S. dollars at the prevailing exchange rates on the respective dates of the transactions.
Net realized and unrealized gains and losses on foreign currency transactions represent net gains and losses between trade and settlement dates on securities transactions, the acquisition and disposition of foreign currencies, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. The portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed, but is included with net realized and unrealized gain/appreciation and loss/depreciation on investments.
Securities Lending The Funds may lend securities to certain financial institutions under the terms of their securities lending agreement. During the term of the loans, the Funds continue to receive interest and dividends generated by the securities and to participate in any changes in their market value. The Funds require the borrowers of the securities to maintain collateral with the Funds consisting of cash and/or securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities having a value at least equal to the value of the securities loaned. When the collateral falls below specified amounts, the lending agent will use its best effort to obtain additional collateral on the next business day to meet required amounts under the securities lending agreement. During the year ended August 31, 2020, the Funds invested the cash collateral into a joint trading account in DWS Government & Agency Securities Portfolio, an affiliated money market fund managed by DWS Investment Management Americas, Inc. DWS Investment Management Americas, Inc. receives a management/administration fee (0.06% annualized effective rate as of August 31, 2020) on the cash collateral invested in DWS Government & Agency Securities Portfolio. The Funds receive compensation for lending their securities either in the form of fees or by earning interest on invested cash collateral, net of borrower rebates and fees paid to a lending agent. Either the Fund or the borrower may terminate the loan at any time and the borrower, after notice, is required to return borrowed securities within a standard time period. There may be risks of delay and costs in recovery of securities or even loss of rights in the collateral should the borrower of the securities fail financially. If the Funds are not able to recover securities lent, the Funds may sell the collateral and purchase a replacement investment in the market, incurring the risk that the value of the replacement security is greater than the value of the collateral. The Funds are also subject to all investment risks associated with the reinvestment of any cash collateral received, including, but not limited to, interest rate, credit and liquidity risk associated with such investments.
65
DBX ETF Trust
Notes to Financial Statements (Continued)
As of August 31, 2020, the Funds listed below had securities on loan. The value of the related collateral exceeded the value of the securities loaned at Year end.
| Remaining Contractual Maturity of the Agreements, as of August 31, 2020 |
||||||||||||||||||||
| Securities Lending Transactions | Overnight and Continuous |
<30 Days | Between 30 & 90 days |
>90 days | Total | |||||||||||||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
|
|||||||||||||||||||
| Common Stocks |
$ | 1,188,901 | $ | — | $ | — | $ | 529,707 | $ | 1,718,608 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions |
|
$ | 1,718,608 | |||||||||||||||||
| Xtrackers MSCI Kokusai Equity ETF |
|
|||||||||||||||||||
| Common Stocks |
$ | 70,099 | $ | — | $ | 5,834 | $ | 524,761 | $ | 600,694 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions |
|
$ | 600,694 | |||||||||||||||||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
|
|||||||||||||||||||
| Common Stocks |
$ | 50,625 | $ | 23,323 | $ | 80,202 | $ | 3,542,754 | $ | 3,696,904 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions |
|
$ | 3,696,904 | |||||||||||||||||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
|
|||||||||||||||||||
| Common Stocks |
$ | 37,088 | $ | 5,342 | $ | 25,754 | $ | 1,321,947 | $ | 1,390,131 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions |
|
$ | 1,390,131 | |||||||||||||||||
Derivatives
Futures Contracts Each Fund may enter into futures contracts. These futures contracts will be used to simulate investment in the respective Underlying Index, to facilitate trading or to reduce transaction costs. Each Fund will enter into futures contracts that are traded on a U.S. or non-U.S. exchange. No Fund will use futures for speculative purposes. Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a specific instrument or index at a specified future time and at a specified price. For the year ended August 31, 2020, Xtrackers FTSE Developed ex US Comprehensive Factor ETF, Xtrackers MSCI Kokusai Equity ETF, Xtrackers Russell 1000 Comprehensive Factor ETF and Xtrackers Russell 1000 US Quality at a Reasonable Price utilized futures in order to simulate investment in the Underlying Index. To the extent required by law, liquid assets committed to futures contracts will be maintained.
At the time each Fund enters into a futures contract, each Fund deposits and maintains as collateral an initial margin with the broker, as required by the exchange on which the transaction is affected. Pursuant to the contract, each Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as variation margin and are recorded by each Fund as unrealized gains or losses. Risks may arise from the potential inability of a counterparty to meet the terms of the contract. The credit/counterparty risk for exchange-traded futures contracts is generally less than privately negotiated futures contracts, since the clearinghouse, which is the issuer or counterparty to each exchange-traded future, provides a guarantee of performance. The guarantee is supported by a daily payment system (i.e., margin requirements).
Use of long futures contracts subjects each Fund to risk of loss in excess of the amounts shown on the Statement of Assets and Liabilities, up to the notional value of the futures contracts. Use of short futures contracts subjects each Fund to unlimited risk of loss. Under some circumstances, futures exchanges may establish daily limits on the amount that the price of a futures contract can vary from the previous day’s settlement price, which could effectively prevent liquidation of unfavorable positions.
A summary of the open futures contracts as of August 31, 2020 is included in a table following the Funds’ Schedule of Investments.
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DBX ETF Trust
Notes to Financial Statements (Continued)
The following tables summarize the value of the Funds’ derivative instruments held as of August 31, 2020 and the related location in the accompanying Statement of Assets and Liabilities, presented by primary underlying risk exposure:
| Asset Derivatives |
Liability Derivatives |
|||||||||||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF | ||||||||||||||
| Equity contracts | Unrealized appreciation on futures contracts* | $ | 13,220 | Unrealized depreciation on futures contracts* | $ | — | ||||||||
| Xtrackers MSCI Kokusai Equity ETF | ||||||||||||||
| Equity contracts | Unrealized appreciation on futures contracts* | $ | 20,370 | Unrealized depreciation on futures contracts* | $ | 405 | ||||||||
| Xtrackers Russell 1000 Comprehensive Factor ETF | ||||||||||||||
| Equity contracts | Unrealized appreciation on futures contracts* | $ | 109,352 | Unrealized depreciation on futures contracts* | $ | — | ||||||||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF | ||||||||||||||
| Equity contracts | Unrealized appreciation on futures contracts* | $ | 72,265 | Unrealized depreciation on futures contracts* | $ | — | ||||||||
| * | Includes cumulative appreciation or cumulative depreciation of futures contracts as disclosed in the Schedule of Investments. Unsettled variation margin is disclosed separately within the Statement of Assets and Liabilities. |
Additionally, the amount of realized and unrealized gains and losses on derivative instruments recognized in the Funds’ earnings during the year ended August 31, 2020 and the related location in the accompanying Statement of Operations is summarized in the following tables by primary underlying risk exposure:
| Net Realized Gain (Loss) from: |
||||
| Futures Contracts — Equity Contracts |
||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
$ | 63,010 | ||
| Xtrackers MSCI Kokusai Equity ETF |
56,004 | |||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
(271,212 | ) | ||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
42,984 | |||
| Net Change in Unrealized Appreciation (Depreciation) on: |
||||
| Futures Contracts — Equity Contracts |
||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
$ | 33,440 | ||
| Xtrackers MSCI Kokusai Equity ETF |
19,965 | |||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
113,997 | |||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
9,957 | |||
For the year ended August 31, 2020 the average monthly volume of derivatives was as follows:
| Futures Contracts (Contract Value) |
||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
$ | 483,740 | ||
| Xtrackers MSCI Kokusai Equity ETF |
388,676 | |||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
1,502,227 | |||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
902,157 | |||
Affiliated Cash Management Vehicles The Funds may invest uninvested cash balances in DWS Government Money Market Series and DWS ESG Liquidity Fund, affiliated money market funds which are managed by DWS Investment Management Americas, Inc. (“DIMA”), also an indirect, wholly owned subsidiary of DWS Group GmbH & Co. KGaA. Each affiliated money market fund is managed in accordance with Rule 2a-7 under the 1940 Act, which governs the quality, maturity, diversity and liquidity of instruments in which a money market fund may invest. DWS Government Money Market Series seeks to maintain a stable NAV, and DWS ESG Liquidity Fund maintains a floating NAV. The Funds indirectly bear their proportionate share of the expenses of each affiliated
67
DBX ETF Trust
Notes to Financial Statements (Continued)
money market fund in which they invest. The Advisor will waive an amount of the unitary advisory fee payable to the Advisor by the Funds equal to such acquired fund’s fees and expenses on the Funds’ assets invested in the affiliated money market funds.
3. Investment Advisory and Other Agreements
The Advisor has overall responsibility for the general management and administration of the Funds, subject to the supervision of the Funds’ Board of Trustees. Under an investment advisory agreement between the Trust, on behalf of the Funds, and the Advisor (the “Investment Advisory Agreement”), the Advisor is responsible for arranging sub-advisory, transfer agency, custody, fund administration, and all other non-distribution related services for the Funds to operate.
For its investment advisory services to the Funds below, the Advisor is entitled to receive a unitary advisory fee from each Fund based on each Fund’s average daily net assets, computed and accrued daily and payable monthly, at an annual rate equal to:
| Unitary Advisory Fee |
||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
0.35 | % | ||
| Xtrackers MSCI Kokusai Equity ETF |
0.09 | % | ||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
0.17 | % | ||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
0.19 | % | ||
The Advisor for Xtrackers FTSE Developed ex US Comprehensive Factor ETF has contractually agreed, until December 19, 2020, to waive a portion of its unitary advisory fee to the extent necessary to prevent the operating expenses of the Fund from exceeding 0.24% of the Fund’s average daily net assets. For the year ended August 31, 2020, the Advisor waived $79,354 of expenses to the Fund.
The Advisor for the Funds below has contractually agreed to waive a portion of its unitary advisory fees in an amount equal to the acquired fund’s fees and expenses attributable to the Funds’ investments in affiliated Funds. For the year ended August 31, 2020, the Advisor waived expenses of the Funds as follows:
| Expenses Waived |
||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
$ | 118 | ||
| Xtrackers MSCI Kokusai Equity ETF |
80 | |||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
1,206 | |||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
544 | |||
Out of the unitary advisory fee, the Advisor pays substantially all expenses of each Fund, including the cost of transfer agency, custody, fund administration, legal, audit and other services, and expenses of the Independent Trustees. Each Fund is responsible for the payment of interest expense, acquired fund fees and expenses, taxes, brokerage expenses, distribution fees or expenses, if any, litigation expenses and extraordinary expenses.
The Bank of New York Mellon, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as Administrator, Custodian, Accounting Agent, Lending Agent and Transfer Agent for each Fund.
ALPS Distributors, Inc. (the “Distributor”) serves as the distributor of Creation Units for each Fund on an agency basis. The Distributor does not maintain a secondary market in shares of the Funds.
The Board of Trustees is currently comprised of three Independent Trustees. The Advisor paid retainer fees and attendance fees to each Independent Trustee; retainer fees to the Chairman of the Board of Trustees and Chairman of the Audit Committee; and attendance fees to each member of the Audit Committee (which is comprised of all of the Funds’ Independent Trustees).
68
DBX ETF Trust
Notes to Financial Statements (Continued)
4. Investment Portfolio Transactions
For the year ended August 31, 2020, the cost of investments purchased and proceeds from sale of investments (excluding in-kind transactions and short-term investments) were as follows:
| Purchases | Sales | |||||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
$ | 30,333,250 | $ | 30,889,018 | ||||
| Xtrackers MSCI Kokusai Equity ETF |
11,325,032 | 5,771,128 | ||||||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
81,758,297 | 81,618,427 | ||||||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
25,601,764 | 22,182,001 | ||||||
For the year ended August 31, 2020, the cost of in-kind purchases and proceeds from in-kind sales were as follows:
| Purchases | Sales | |||||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
$ | 13,006,744 | $ | 14,549,568 | ||||
| Xtrackers MSCI Kokusai Equity ETF |
109,859,009 | 8,436,587 | ||||||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
74,641,017 | 124,936,633 | ||||||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
24,134,498 | 49,937,323 | ||||||
5. Fund Share Transactions
As of August 31, 2020, there were unlimited Fund shares, no par value, authorized by the Trust. Fund shares are issued and redeemed by each Fund only in Creation Units or multiples thereof. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets. The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind contribution of a designated portfolio of securities constituting a portfolio sampling representation of the securities included in the respective Fund’s Underlying Index and an amount of cash, which under certain circumstances may include cash in lieu of portfolio securities. Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.
6. Payments by Affiliates
During the year ended August 31, 2020, the Advisor agreed to reimburse Xtrackers MSCI Kokusai Equity ETF $26,486 for a loss due to a trade executed incorrectly. The amount compensated was 0.03% of the Fund’s average net assets.
7. Other — COVID-19 Pandemic
A novel strain of coronavirus (COVID-19) outbreak was declared a pandemic by the World Health Organization on March 11, 2020. The situation is evolving with various cities and countries around the world responding in different ways to address the pandemic. There are direct and indirect economic effects developing for various industries and individual companies throughout the world. The recent pandemic spread of the novel coronavirus and related geopolitical events could lead to increased financial market volatility, disruption to U.S. and world economies and markets and may have significant adverse effects on a Fund and its investments. A prolonged disruption may result in a Fund and its service providers experiencing operational difficulties in implementing their business continuity plans. Management will continue to monitor the impact COVID-19 has on the Funds and reflect the consequences as appropriate in each Fund’s accounting and financial reporting.
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DBX ETF Trust
To the Shareholders of Xtrackers FTSE Developed ex US Comprehensive Factor ETF, Xtrackers Russell 1000 Comprehensive Factor ETF, Xtrackers Russell 1000 US Quality at a Reasonable Price ETF, Xtrackers MSCI Kokusai Equity ETF and the Board of Trustees of DBX ETF Trust:
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of Xtrackers FTSE Developed ex US Comprehensive Factor ETF, Xtrackers Russell 1000 Comprehensive Factor ETF, Xtrackers Russell 1000 US Quality at a Reasonable Price ETF, and Xtrackers MSCI Kokusai Equity ETF (collectively referred to as the “Funds”), (four of the funds constituting DBX ETF Trust (the “Trust”)), including the schedules of investments, as of August 31, 2020, and the related statements of operations and changes in net assets, and the financial highlights for each of the periods indicated in the table below and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds (four of the funds constituting DBX ETF Trust) at August 31, 2020, and the results of their operations, changes in net assets and financial highlights for each of the periods indicated in the table below, in conformity with U.S. generally accepted accounting principles.
| Individual fund constituting the DBX ETF Trust |
Statement of operations | Statements of changes in net assets |
Financial highlights | |||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF
Xtrackers Russell 1000 Comprehensive Factor ETF |
For the year ended August 31, 2020 | For each of the two years in the period ended August 31, 2020 | For each of the four years in the period ended August 31, 2020 and the period from November 24, 2015 (commencement of operations) through August 31, 2016 | |||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF | For the year ended August 31, 2020 | For each of the two years in the period ended August 31, 2020 | For each of the two years in the period ended August 31, 2020 and the period from April 5, 2018 (commencement of operations) through August 31, 2018 | |||
| Xtrackers MSCI Kokusai Equity ETF | For the period from April 8, 2020 (commencement of operations) through August 31, 2020 | |||||
Basis for Opinion
These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on each of the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
70
DBX ETF Trust
Report of Independent Registered Public Accounting Firm (Continued)
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 2020, by correspondence with the custodians and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more investment companies in the DWS family of funds since at least 1979, but we are unable to determine the specific year.
New York, New York
October 26, 2020
71
DBX ETF Trust
Xtrackers MSCI Kokusai Equity ETF
After discussions at the meeting of the Board of Trustees (“Board” or “Trustees”) held on November 12, 2019, the Trustees, including the Independent Trustees (those not affiliated with DBX ETF Trust (the “Trust”) or its service providers), unanimously approved the Investment Advisory Agreement with respect to Xtrackers MSCI Kokusai Equity ETF (the “Fund”). The Independent Trustees were advised throughout the review and meeting by K&L Gates LLP (“Independent Trustee Counsel”).
In reaching this decision, the Board considered all factors it believed relevant, including (1) the nature, extent and quality of the services to be provided to the Fund and its shareholders; (2) the financial resources of DBX Advisors LLC (“DBX” or the “Advisor”) and its resulting ability to perform its obligations under the Investment Advisory Agreement; (3) the competitiveness of the advisory fee; (4) the total cost of the services to be provided by, and the anticipated profits to be realized, by the Advisor from its relationship with the Fund; (5) the extent to which economies of scale would be realized, and if the Fund’s shareholders would benefit from those economies.
The Board reached a determination, with the assistance of Dechert LLP (“Trust Counsel”) and through the exercise of its business judgment, that approval of the Investment Advisory Agreement and the compensation to be received thereunder is in the best interests of the Fund and its shareholders as well as consistent with the Board’s duties under state and federal law. The Board reached this conclusion based on multiple factors.
The Board considered the following in determining whether to approve the Investment Advisory Agreement:
Nature, Extent and Quality of Services. The Board reviewed in detail the nature, extent and quality of services to be provided by the Advisor under the Investment Advisory Agreement. The Board considered that these services include, among other things, furnishing a continuous investment program for the Fund, including arranging for, or implementing, the purchase and sale of portfolio securities, the provision of general corporate services such as portfolio management compliance services and the preparation and filing of certain reports on behalf of the Trust. The Board also considered, among other things, the professional experience, qualifications and performance of the senior management and key professional personnel of the Advisor, including portfolio management.
The Board considered that the Advisor will provide, at its own expense, office facilities and equipment for use by the Fund and supervisory persons responsible for supervising and monitoring the Trust’s service providers. The Board also considered that the Advisor will pay or arrange for the compensation of officers of the Trust who are also officers or employees of the Advisor or one of its Deutsche Bank affiliates, except as may otherwise be determined by the Board. In addition, the Board considered that the Advisor arranges for the provision of transfer agency, custody, fund administration and accounting, and other non-distribution services necessary for the Fund’s operations. The Board also considered that in addition to managing the Fund’s portfolio directly, the Advisor will provide oversight of day-to-day operations, including monitoring tracking error, providing services in connection with the creation and redemption of creation units and assistance in meeting legal, compliance and regulatory requirements applicable to the Fund.
Based on its review, the Board concluded that the nature, extent, and quality of services to be provided by the Advisor under the Investment Advisory Agreement are reasonable and appropriate in relation to the fee to be paid to the Advisor, taking special consideration of the fact that the advisory fee is a unitary fee and, as a result, a portion of the unitary advisory fee will be used to compensate the Fund’s service providers. The Board considered the staffing of the Advisor, including the training, qualifications and experience of investment personnel in managing the Fund. The Board also considered the expertise of the Advisor in supervising third party service providers to its currently managed Funds, such as the administrator and the custodian (which would also provide those services to the Fund), noting the Advisor’s extensive work with these service providers (including onsite due diligence sessions) to conduct such supervision (which would cover the Fund as well). The Board further considered the compliance program of the Advisor, which supports the compliance program of the Advisor’s currently managed Funds (which would also cover the Fund).
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DBX ETF Trust
Board Consideration in Approval of Investment Advisory Contracts (Unaudited) (Continued)
Advisor’s Financial Resources. In connection with the assessment of the ability of the Advisor to perform its duties under the Investment Advisory Agreement, the Board considered the Advisor’s financial condition and whether it has the resources necessary to carry out its functions. The Board concluded that the Advisor has the financial resources necessary to perform its obligations under the Investment Advisory Agreement.
Reasonableness of Advisory Fee. The Board compared the Fund’s advisory fee to that of other pertinent exchange-traded funds (“ETFs”) and noted that the Fund’s fee is competitive with the fees of its respective peer group. The Board agreed that it was familiar with the Advisor’s methodology for selecting the Fund’s peer group and believed that the Fund’s peer group was appropriate. The Board considered that the proposed fee for the Fund is a unitary fee pursuant to which the Advisor pays all of the Fund’s costs (subject to certain specified exceptions). The Board also considered that the Fund’s portfolio will be managed on a day-to-day basis by the Advisor and that the Advisor will also provide oversight of day-to-day operations, including monitoring tracking error, providing services in connection with creation and redemption units and assistance in meeting legal and regulatory requirements applicable to the Fund. Based on its review, the Board concluded that the advisory fee for the Fund is reasonable in light of the services to be provided.
Costs of Services and Profitability. The Board considered the anticipated expenses of the Advisor in developing and rendering services to be provided to the Fund and the likelihood and level of profits in the early years of the Fund’s operations. The Board noted that because the Fund is new, it is difficult to estimate the profitability of the Fund to the Advisor at this time. The Board considered whether the Advisor would benefit in other ways from its relationships with the Fund and concluded that there were no material fall-out benefits likely to accrue to the Advisor related to the operation of the Fund.
Economies of Scale. The Board noted that the Fund’s advisory fee was set at a competitive level that was designed to reflect scale in assets from the Fund’s commencement of operations. The Board noted that because the Fund is new, it is difficult to estimate whether the Fund would experience economies of scale beyond those already reflected in the advisory fee. The Board determined to evaluate economies of scale on an ongoing basis as a result of asset growth of the Fund.
Given all the information available to it and considering all material factors, the Board concluded that the Investment Advisory Agreement was fair and reasonable and it was unanimously approved.
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DBX ETF Trust
Identification and Background
The Board has responsibility for the overall management and operations of the funds, including general supervision of the duties performed by the Advisor and other service providers. Each Board Member serves until his or her successor is duly elected or appointed and qualified. Each officer serves until he or she resigns, is removed, dies, retires or becomes disqualified.
The Trust currently has three Board Members. The three Independent Board Members have no affiliation or business connection with the Advisor or any of its affiliated persons and do not own any stock or other securities issued by the Advisor.
The Independent Board Members of the Trust, their term of office and length of time served, their principal business occupations during the past five years, the number of portfolios in the fund complex (defined below) overseen by each Independent Board Member, and other directorships, if any, held by the Board Members are shown below. The fund complex includes all registered open- and closed-end funds (including all of their portfolios) advised by the Advisor and any registered funds that have an investment advisor that is an affiliated person of the Advisor. As of the date of this shareholder report, the fund complex consists of the funds in the Trust, as well as the registered funds advised by affiliates of the Advisor.
Shareholder Communications to the Board. Shareholders may send communications to the Trust’s Board by addressing the communications directly to the Board (or individual Board Members) and/or otherwise clearly indicating in the salutation that the communication is for the Board (or individual Board Members). The shareholder may send the communication to either the Trust’s office or directly to such Board members c/o 875 Third Avenue, New York, NY 10022. Other shareholder communications received by the Trust not directly addressed and sent to the Board will be reviewed and generally responded to by management. Such communications will be forwarded to the Board at management’s discretion based on the matters contained therein.
| Independent Board Members | ||||||
| Name, Year of Birth, Position with the Trust and Length of Time Served(1) |
Business Experience and Directorships During the Past 5 Years |
Number of Portfolios in Fund Complex Overseen |
Other Directorships Held by Board Member | |||
| Stephen R. Byers (1953) Chairman since 2016, and Board Member since 2011 (formerly, Lead Independent Board Member, 2015-2016) |
Independent Director (2011- present); Independent Consultant (2014-present); Director of Investment Management, the Dreyfus Corporation (2000-2006) and Vice Chairman and Chief Investment Officer, the Dreyfus Corporation (2002-2006). | 33 | The Arbitrage Funds, Sierra Income Corporation, Mutual Fund Directors Forum | |||
| George O. Elston (1964) Board Member since 2011, Chairman of the Audit Committee since 2015 |
Chief Financial Officer, Enzyvant (2018-present); Chief Executive Officer, 2X Oncology, Inc. (2017-2018); Senior Vice President and Chief Financial Officer, Juniper Pharmaceuticals, Inc. (2014-2016); Senior Vice President and Chief Financial Officer, KBI BioPharma Inc. (2013-2014); Managing Partner, Chatham Street Partners (2010-2013). | 33 | — | |||
| J. David Officer (1948) Board Member since 2011, Chairman of the Nominating Committee since 2015 |
Independent Director (2010-present); Vice Chairman, the Dreyfus Corporation (2006-2009); President, The Dreyfus Family of Funds, Inc. (2006-2009). |
33 | (Chairman of) Ilex Management Ltd; Old Westbury Funds | |||
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DBX ETF Trust
Board Members and Officers (Unaudited) (Continued)
| Officers(2) | ||||||
| Name, Year of Birth, Position with the Trust and Length of Time Served(4) |
Business Experience and Directorships During the Past 5 Years | |||||
| Freddi Klassen(5) (1975) President and Chief Executive Officer, 2016- present |
Director(3) in DWS and Chief Operating Officer in the Americas for the Traditional Asset Classes Department (2014-present); Manager and Chief Operating Officer of DWS Investment Management Americas, Inc. (2018-present) and the Advisor (2016-present); Global Chief Operating Officer for Equities Technology in the Investment Bank Division at Deutsche Bank AG (2013-2014); Chief Operating Officer for Exchange Traded Funds and Systematic Funds in Europe (2008-2013). | |||||
| Luke Oliver(5) (1980) Chief Operating Officer, 2019-present |
Managing Director(3) in DWS (2017-present); Director(3) in DWS (2009-2017); Head of Passive Americas Asset Management Platform (2019-present); Manager, Chief Executive Officer and Chief Investment Officer of the Advisor (2019-present); Head of ETF Capital Markets, Americas (2012-2018); Lead Portfolio Manager of PowerShares DB ETFs (2009-2012). | |||||
| Diane Kenneally(6) (1966) Treasurer, Chief Financial Officer and Controller, 2019-present |
Director(3) in DWS; Chief Financial Officer and Treasurer for DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (2018-present); Treasurer and Chief Financial Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2018-present); formerly: Assistant Treasurer for the DWS funds (2007-2018). | |||||
| Frank Gecsedi(5) (1967) Chief Compliance Officer, 2010-present |
Director(3) in DWS Compliance Department (2016-present), Vice President in the Deutsche Asset Management Compliance Department at Deutsche Bank AG (2013-2016) and Chief Compliance Officer of the Advisor (2010-present); Chief Compliance Officer of DWS Distributors, Inc. (2019-present); Vice President in Deutsche Bank’s Global Markets Legal, Risk and Capital Division (2010-2012). | |||||
| Bryan Richards(5) (1978) Vice President, 2016-present |
Managing Director(3) in DWS (2018-present); Director(3) in DWS (2014-2018); Portfolio Manager in the Passive Asset Management Department at DWS (2011-present); Primary Portfolio Manager for the PowerShares DB Commodity ETFs (2011-2015). | |||||
| John Millette(6) (1962) Secretary, 2020-present |
Director(3) in DWS US Retail Legal (2003-present); Vice President and Secretary of DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (1999-present); Chief Legal Officer, DWS Investment Management Americas, Inc. (2015-present); Director and Vice President of DWS Trust Company (2016-present); Secretary, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2011-present); formerly: Secretary of Deutsche Investment Management Americas Inc. (2015-2017); Assistant Secretary of DBX ETF Trust (2019-2020); Assistant Secretary (July 14, 2006-December 31, 2010) and Secretary (January 31, 2006-July 13, 2006), The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. | |||||
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DBX ETF Trust
Board Members and Officers (Unaudited) (Continued)
| Name, Year of Birth, Position with the Trust and Length of Time Served(4) |
Business Experience and Directorships During the Past 5 Years | |||||
| Caroline Pearson(6) (1962) Assistant Secretary, 2020-present |
Managing Director(3) in DWS US Retail Legal; Chief Legal Officer of DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (2010-present); Chief Legal Officer, DBX Advisors LLC and DBX Strategic Advisors LLC (2020-present); Chief Legal Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2012-present); formerly: Secretary, Deutsche AM Distributors, Inc. (2002-2017); and Secretary, Deutsche AM Service Company (2010-2017). | |||||
| Paul Antosca(6) (1957) Assistant Treasurer, 2019-present |
Director(3) in DWS; Assistant Treasurer for DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (2007-present). | |||||
| Jeffrey Berry(6) (1959) Assistant Treasurer, 2019-present |
Director(3) in DWS. | |||||
| Sheila Cadogan(6) (1966) Assistant Treasurer, 2019-present |
Director(3) in DWS; Assistant Treasurer for DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (2017-present); Director and Vice President, DWS Trust Company (2018-present); Assistant Treasurer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2018-present). | |||||
| Christina A. Morse(7) (1964) Assistant Secretary, 2017-present |
Vice President at BNY Mellon-Asset Servicing (2014-present); Vice President and Counsel at Lord Abbett & Co. LLC (2013-2014). | |||||
| Michelle Goveia-Pine(5) (1970) Interim Anti-Money Laundering Compliance Officer, since July 9, 2020 |
Director(3) in DWS; Interim AML Officer, DWS Trust Company (since July 28, 2020); and Interim AML Officer of DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (since July 10, 2020); Interim AML Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (since July 24, 2020). | |||||
| (1) | The length of time served is represented by the year in which the Board Member joined the Board. |
| (2) | As a result of their respective positions held with the Advisor and its affiliates, these individuals are considered “interested persons” of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the Funds. |
| (3) | Executive title, not a board directorship. |
| (4) | The length of time served is represented by the year in which the officer was first elected to the Trust in such capacity. |
| (5) | Address: 875 Third Avenue, New York, New York 10022. |
| (6) | Address: 100 Summer Street, Boston, MA 02110. |
| (7) | Address: BNY Mellon Asset Servicing, 240 Greenwich Street, New York, NY 10286. |
The Funds’ Statement of Additional Information (“SAI”) includes additional information about the Funds’ Board Members. The SAI is available by calling 855-329-3837, or on the Company’s website at www.Xtrackers.com.
76
DBX ETF Trust
Proxy Voting Policies and Procedures
The Funds’ policies and procedures for voting proxies for portfolio securities and information about how each Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 are available on our Web site — www.Xtrackers.com (click on “Resources” and “Proxy Voting” at the top of the page) — or on the SEC’s Web site — www.sec.gov. To obtain a written copy of the Funds’ policies and procedures without charge, upon request, call us toll free at (855) 329-3837.
Portfolio Holdings Information
The Funds are required to file their complete schedule of portfolio holdings with the SEC for their first and third fiscal quarters on Form N-PORT. Copies of the filings are available without charge, upon request on the SEC’s website at www.sec.gov and are available by calling the Trust at 855-329-3837.
Information about each Fund’s portfolio holdings is available daily at www.Xtrackers.com.
Discount & Premium Information
Information regarding how often shares of each Fund traded on NYSE Arca at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV of the Fund can be found at www.Xtrackers.com.
Tax Information
Form 1099-DIV and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.
Each Fund designates the following amounts or, if subsequently determined to be different, the maximum allowable for its year ended August 31, 2020.
| Qualified Dividend Income* |
Dividends Received Deduction* |
|||||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
72% | 0% | ||||||
| Xtrackers Russell 1000 Comprehensive Factor ETF |
83% | 78% | ||||||
| Xtrackers Russell 1000 US Quality at a Reasonable Price ETF |
100% | 96% | ||||||
* The above percentage is based on ordinary income dividends paid to shareholders during each Fund’s fiscal year.
Each Fund intends to elect to pass through to shareholders the credit for taxes paid to foreign countries. The gross foreign source income and foreign taxes paid are as follows:
| Gross Foreign Income | Foreign Taxes Income | |||||||
| Xtrackers FTSE Developed ex US Comprehensive Factor ETF |
$2,055,386 | $159,606 | ||||||
77
DBX ETF Trust
DBX Advisors LLC (“Advisors”) collects non-public information about you from the following sources: (i) information received from you on applications or other forms; and (ii) information about your transactions with the Advisors, Advisors’ affiliates and third-party service providers and vendors. Advisors does not disclose any non-public personal information about you to anyone, other than as set forth below, as permitted by applicable law and regulation. Advisors may disclose non-public personal information about you to the funds in which you invest, to Advisors’ affiliates, and to non-affiliated companies that work with Advisors to service your account(s), or to provide services or process transactions that you have requested. Advisors may disclose non-public personal information in situations that may include, but are not limited to, in response to legal and/or regulatory inquiries and the proposed or actual sale, assignment merger or other transfer of all or a portion of Advisors’ business to another business entity. Advisors may also disclose non-public personal information about you to parties representing you, such as your investment representative, your accountant, your tax advisor, or to other third parties at your direction/consent. Advisors will not sell, rent, license or trade your personal and financial information to or with third parties for their own direct marketing use unless you give us general or specific consent to do so. If you decide to close your account(s) or become an inactive customer, Advisors will adhere to the privacy policies and practices as described in this notice. Advisors restricts access to your personal and account information to those employees who need to know that information to provide products and services to you. Advisors maintains reasonable and customary physical, electronic and procedural safeguards to guard your non-public personal information.
California residents may go to https://fundsus.dws.com/us/en-us/legal-resources/privacy-policy.html to obtain additional information relating to their rights under California state law.
Advisors reserves the right, at their discretion, to change, modify, add, or remove portions of this Privacy Policy Notice, and any of the policies described herein, at any time. Advisors will indicate any such changes to the Privacy Policy Notice at the privacy link which can be found at www.Xtrackers.com. At all times, you are bound by the then-current version of the Privacy Policy and all applicable laws. Advisors highly recommends that you review this Privacy Policy Notice from time to time to ensure that you are familiar with the most recent version. The examples contained in this Privacy Policy Notice are illustrations; they are not intended to be exclusive.
78
DBX ETF Trust
This report is intended for the shareholders of the DBX ETF Trust.
This report must be preceded or accompanied by a prospectus.
Investing involves risk, including the possible loss of principal. Stocks may decline in value. Foreign investing involves greater and different risks than investing in U.S. companies, including currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive company information, political instability and differing auditing and legal standards. Funds investing in a single industry, country or in a limited geographic region, generally are more volatile than more diversified funds. Because the Funds seek to provide exposure to stocks based on the following multifactors — value, momentum, quality, low volatility and size — it is expected, exposure to such investment factors will detract from performance in some market environments, as more fully explained in the Funds’ prospectus. QARP and KOKU are currently non-diversified and can take larger positions in fewer issues, increasing their potential risk. Performance of a Fund may diverge from that of its Underlying Index due to operating expenses, transaction costs, cash flows, use of sampling strategies or operational inefficiencies. An investment in any Fund should be considered only as a supplement to a complete investment program for those investors willing to accept the risks associated with that Fund. Please read the prospectus for more information.
War, terrorism, economic uncertainty, trade disputes, public health crises (including the recent pandemic spread of the novel coronavirus) and related geopolitical events could lead to increased market volatility, disruption to U.S. and world economies and markets and may have significant adverse effects on the Funds and their investments.
Shares of the Funds are bought and sold at market price (not NAV) throughout the day on the NYSE Arca, Inc. Transactions in Fund shares may result in brokerage commissions and may generate tax consequences. There can be no assurance that an active trading market for shares of a Fund will develop or be maintained.
DBX ETF Trust Funds are distributed by ALPS Distributors, Inc. (“ALPS”). The Funds are managed by DBX Advisors LLC which is not affiliated with ALPS.
The brand DWS represents DWS Group GmbH & Co. KGaA and any of its subsidiaries such as DWS Distributors, Inc. which offers investment products or Deutsche Investment Management Americas Inc. and RREEF America L.L.C. which offer advisory services.
DEEF, DEUS and QARP have been developed solely by DBX Advisors LLC. The Funds are not in any way connected to or sponsored, endorsed, issued, sold or promoted by the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies.
All rights in the Russell 1000 Comprehensive Factor Index and Russell 1000 2Qual/Val 5% Capped Factor Index vest in the relevant LSE Group company which owns the Indexes. “FTSE®” “Russell®” and “FTSE Russell®” are a trademarks of the relevant LSE Group company and are used by any other LSE Group company under license.
The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Funds. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Funds or the suitability of the Indexes for the purpose to which it is being put by DBX Advisors LLC.
KOKU is not sponsored, endorsed, issued, sold or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities or any index on which such funds or securities are based. The Prospectus contains a more detailed description of the limited relationship MSCI has with DBX Advisors LLC and any related funds.
Copyright © 2020 DWS Group. All rights reserved. XtrackersTM is a trademark of DWS Investment GmbH. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
Not FDIC Insured | No Bank Guarantee | May Lose Value
DBX ETF Trust
| Investment advisor DBX Advisors LLC 875 Third Avenue New York, NY 10022 |
Administrator, custodian, fund accounting agent, lending agent & transfer agent The Bank of New York Mellon 240 Greenwich Street New York, NY 10286 |
Distributor ALPS Distributors, Inc. 1290 Broadway Suite 1000 Denver, CO 80203 | ||
| Independent registered public accounting firm Ernst & Young LLP 5 Times Square New York, NY 10036 |
Legal counsel Dechert LLP 1095 Avenue of the Americas New York, NY 10036 |
|||
R-047731-5 (10/20) DBX004596 (10/21)
August 31, 2020
Annual Report
DBX ETF Trust
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (ACSG)
Xtrackers MSCI EAFE ESG Leaders Equity ETF (EASG)
Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (EMSG)
Xtrackers MSCI USA ESG Leaders Equity ETF (USSG)
Xtrackers S&P 500 ESG ETF (SNPE)
DBX ETF Trust
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| Schedule of Investments |
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To our Shareholders: (Unaudited)
Dear Shareholder,
We are pleased to provide this annual report for our five equity ETFs tracking the environmental, social, and governance (ESG) market for the period ended August 31, 2020.
The global economy contracted during the reporting period owing to COVID-19 led disruptions, financial market volatility, and a decline in energy prices. While growth remained in the contractionary territory, resumption of activities gradually helped economies recover from their April trough, anchored by extraordinary stimulus packages. The U.S. economy recorded its largest decline since the 1940s as the spread of the virus intensified, leading to lockdowns and spending cutbacks. Meanwhile, in the Eurozone, prolonged weakness in the industrial sector and lackluster external demand continued to weigh on the economy. Within Emerging Markets, China witnessed a strong recovery, while many other countries continued to remain weak, affected by pandemic-related disruptions and a drop in oil prices.
As the world recovers from the impact of COVID-19, calls for a more sustainable future are growing. The pandemic, which could act as an accelerator for ESG, is supported by the EU’s proposed €750 billion economic stimulus aimed at boosting green industries and technologies, with a strong focus on climate neutrality initiatives. Furthermore, as governments globally introduce more climate-related regulations, it could become a standard practice for companies and investors to commit to net zero emissions. More than 12,000 companies are signatories to the UN Global Compact, which was launched in 2000 with the aim of incorporating sustainability into business activities. Several investors have also made high-level commitments to ESG, signing up to the UN Principles for Responsible Investment or initiatives such as Climate Action 100+ and UNEP’s Tobacco-Free Finance Pledge.
The U.S. economy was impacted severely as measures initiated to contain the pandemic reduced both consumer and business spending. However, after the slowdown in late March and April, a consumer-led recovery began, with a spike in U.S. labor markets. On the policy front, the Federal Reserve Board remained much more dovish than before, unveiling a new strategic framework, wherein employment and inflation will be allowed to overshoot to compensate for past periods of inflation. A combination of unconventional policy support and slowing infection rates has also helped equity markets recover quite sharply since the end of March.
As the pandemic hit economic activities across sectors, ranging from retailers to auto exporters, growth abated in Europe, with Germany, France and Italy entering a recession. The European Central Bank maintained a dovish tilt and introduced a string of measures, including the expansion of the scope of the Pandemic Emergency Purchase Programme envelope. The UK economy deteriorated at a record rate, mainly due to pressures on corporate balance sheets, uncertainties surrounding the pandemic and Brexit1 negotiations. Elsewhere, Japan’s economy recorded its sharpest contraction since World War II, driven by a decline in exports, private consumption, and capital expenditure.
Globally, monetary aggregates are growing briskly, while the inflation outlook remains benign, at least for now. While growth concerns persist, major headwinds include resurgence of the virus, tensions on the geopolitical front, and a re-escalation of the U.S.-China trade war. Amid the virus threat and the drag caused by restrictions, an aggressive fiscal and monetary stimulus is likely to be maintained for a much longer period to ensure recovery is not derailed. On the ESG front, climate change will likely remain a dominant theme, as the world witnesses more climate change-related calamities and governments introduce climate-related regulations. Given the rising significance of sustainable investing among policymakers and investors, we have integrated ESG factors into a range of passive equity products to help you invest for a sustainable future.
1
Our team appreciates your trust and looks forward to serving your investment needs through innovative index-driven strategies.
Sincerely,
/s/ Freddi Klassen
Freddi Klassen
President and Chief Executive Officer
1 Brexit is a combination of the words “Britain” and “Exit” and describes the exit of the United Kingdom from the European Union.
Assumptions, estimates and opinions contained in this document constitute our judgment as of the date of the document and are subject to change without notice. Any projections are based on a number of assumptions as to market conditions and there can be no guarantee that any projected results will be achieved. Past performance is not a guarantee of future results.
2
Management’s Discussion of Fund Performance (Unaudited)
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (ACSG)
The Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (ACSG) seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI ACWI ex USA ESG Leaders Index (the ACSG Index). The ACSG Index provides exposure to companies in the developed and emerging markets that exhibit high Environmental, Social and Governance (ESG) performance relative to their sector peers. For the 12-month period ended August 31, 2020, ACSG shares returned 12.74%, compared to the ACSG Index return of 12.84%.
The majority of sectors contributed positively to performance with the greatest contribution coming from Information Technology, Consumer Discretionary and Healthcare. Financials, Energy and Real Estate were the only negative contributors to the performance. From a geographical perspective, Hong Kong, United States and Japan were the major positive contributors, while Brazil and Spain contributed negatively to performance.
Xtrackers MSCI EAFE ESG Leaders Equity ETF (EASG)
The Xtrackers MSCI EAFE ESG Leaders Equity ETF (EASG) seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI EAFE ESG Leaders Index (the EASG Index). The EASG Index provides exposure to companies across developed market countries, (except the United States and Canada) that exhibit high environmental, social and governance (ESG) performance relative to their sector peers. For the 12-month period ended August 31, 2020, EASG shares returned 10.12%, compared to the EASG Index return of 10.07%.
The majority of sectors contributed positively to performance with the greatest contribution coming from Healthcare, Information Technology and Industrials. Energy, Real Estate, Financials and Communication Services were the only negative contributors to performance. From a geographical perspective, the majority of countries contributed positively to performance with the greatest contribution coming from Japan, Germany and Switzerland, while Spain, Australia and Singapore contributed negatively to performance.
Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (EMSG)
The Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (EMSG) seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI Emerging Markets ESG Leaders Index (the EMSG Index). The EMSG Index provides exposure to large and mid-sized companies across emerging markets that exhibit high Environmental, Social and Governance (ESG) performance relative to their sector peers. For the 12-month period ended August 31, 2020, EMSG shares returned 20.32%, compared to the EMSG Index return of 20.55%.
The majority of sectors contributed positively to performance with the greatest contribution coming from Consumer Discretionary, Information Technology and Communication. Financials was the major negative contributor to performance. From a geographical perspective, Hong Kong, United States and Taiwan were the major positive contributors, while Brazil and South Africa contributed negatively to performance.
Xtrackers MSCI USA ESG Leaders Equity ETF (USSG)
Xtrackers MSCI USA ESG Leaders Equity ETF (USSG) seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI USA ESG Leaders Index (the USSG Index). The USSG Index is designed to provide exposure to large and medium sized companies in US markets that exhibit high Environmental, Social and Governance (ESG) performance relative to their sector peers. For the 12-month period ended August 31, 2020, USSG shares returned 21.42%, compared to the USSG Index return of 21.52%.
The majority of sectors contributed positively to performance with the greatest contribution coming from Information Technology, Consumer Discretionary and Healthcare. Energy and Financials detracted most from the performance.
Xtrackers S&P 500 ESG ETF (SNPE)
Xtrackers S&P 500 ESG ETF (SNPE) seeks investment results that correspond generally to the performance, before fees and expenses, of the S&P 500 ESG Index (the SNPE Index). The SNPE Index measures the performance of securities that fulfill sustainability criteria, while preserving similar overall industry group weights as the S&P 500 index. For the 12-month period ended August 31, 2020, SNPE shares returned 25.71%, compared to the SNPE Index return of 25.90%.
3
DBX ETF Trust
Management’s Discussion of Fund Performance (Unaudited) (Continued)
The majority of sectors contributed positively to performance with the greatest contribution coming from Information Technology, Consumer Discretionary and Healthcare. Energy, Financials and Real Estate were the only negative contributors to performance.
*************************
Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance data visit www.Xtrackers.com. Returns assume that dividends and capital gains distributions have been reinvested. See pages 5-14 of this report for additional performance information, including performance data based on market value.
The views expressed in this report reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team’s views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Current and future portfolio holdings are subject to risk.
4
Performance Summary (Unaudited)
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (ACSG)
The Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (the “Fund”), using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI ACWI ex USA ESG Leaders Index (the “Underlying Index”). The Underlying Index is a capitalization weighted index that provides exposure to companies with high environmental, social and governance (“ESG”) performance relative to their sector peers and is constructed using regional indexes that provide exposure to large- and medium-capitalization companies from developed and emerging markets countries (excluding the United States). It is not possible to invest directly into an index.
| Performance as of August 31, 2020 |
| Average Annual Total Return | ||||||||
| Net Asset Value | Market Value | MSCI ACWI ex USA ESG Leaders Index |
MSCI ACWI ex USA Index | |||||
| One Year |
12.74% | 12.78% | 12.84% | 8.31% | ||||
| Since Inception1 |
9.24% | 9.27% | 9.35% | 6.49% | ||||
| Cumulative Total Returns | ||||||||
| Net Asset Value | Market Value | MSCI ACWI ex USA ESG Leaders Index |
MSCI ACWI ex USA Index | |||||
| One Year |
12.74% | 12.78% | 12.84% | 8.31% | ||||
| Since Inception1 |
16.62% | 16.71% | 16.85% | 11.57% | ||||
1 Total returns are calculated based on the commencement of operations, December 6, 2018 (“Inception”).
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.Xtrackers.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the sale of fund shares or redemption of fund creation units. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are sold in the market or redeemed. Performance for certain funds may reflect a waiver of a portion of the unitary advisory fee. Without such waiver, performance would have been lower. The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated December 20, 2019, was 0.16%, and may differ from the expense ratio disclosed in the Financial Highlights table in this report.
The Fund’s net asset value or “NAV” is calculated by dividing the value of the Fund’s total assets less total liabilities by the number of shares outstanding. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
5
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (ACSG) (Continued)
* As a percent of total investments excluding exchange-traded funds, securities lending collateral and cash equivalents.
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund’s investment portfolio see page 16.
6
DBX ETF Trust
Xtrackers MSCI EAFE ESG Leaders Equity ETF (EASG)
The Xtrackers MSCI EAFE ESG Leaders Equity ETF (the “Fund”), using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI EAFE ESG Leaders Index (the “Underlying Index”). The Underlying Index is a capitalization weighted index that provides exposure to companies with high environmental, social and governance (“ESG”) performance relative to their sector peers and consists of large- and medium-capitalization companies across developed markets countries, excluding Canada and the United States. It is not possible to invest directly into an index.
| Performance as of August 31, 2020 |
| Average Annual Total Return | ||||||||
| Net Asset Value | Market Value | MSCI EAFE ESG Leaders Index |
MSCI EAFE Index | |||||
| One Year |
10.12% | 9.51% | 10.07% | 6.13% | ||||
| Since Inception1 |
4.49% | 4.31% | 4.44% | 2.34% | ||||
| Cumulative Total Returns | ||||||||
| Net Asset Value | Market Value | MSCI EAFE ESG Leaders Index |
MSCI EAFE Index | |||||
| One Year |
10.12% | 9.51% | 10.07% | 6.13% | ||||
| Since Inception1 |
9.12% | 8.75% | 9.03% | 4.72% | ||||
1 Total returns are calculated based on the commencement of operations, September 6, 2018 (“Inception”).
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.Xtrackers.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the sale of fund shares or redemption of fund creation units. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are sold in the market or redeemed. Performance for certain funds may reflect a waiver of a portion of the unitary advisory fee. Without such waiver, performance would have been lower. The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated December 20, 2019, was 0.14%, and may differ from the expense ratio disclosed in the Financial Highlights table in this report.
The Fund’s net asset value or “NAV” is calculated by dividing the value of the Fund’s total assets less total liabilities by the number of shares outstanding. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
7
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers MSCI EAFE ESG Leaders Equity ETF (EASG) (Continued)
* As a percent of total investments excluding exchange-traded funds, securities lending collateral and cash equivalents.
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund’s investment portfolio see page 27.
8
DBX ETF Trust
Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (EMSG)
The Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (the “Fund”), using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI Emerging Markets ESG Leaders Index (the “Underlying Index”). The Underlying Index is a capitalization weighted index that provides exposure to companies with high environmental, social and governance (“ESG”) performance relative to their sector peers and consists of large- and medium-capitalization companies across emerging markets countries. It is not possible to invest directly into an index.
| Performance as of August 31, 2020 |
| Average Annual Total Return | ||||||||
| Net Asset Value | Market Value | MSCI Emerging Markets ESG Leaders Index |
MSCI Emerging Markets Index | |||||
| One Year |
20.32% | 20.76% | 20.55% | 14.49% | ||||
| Since Inception1 |
11.11% | 11.28% | 11.49% | 7.57% | ||||
| Cumulative Total Returns | ||||||||
| Net Asset Value | Market Value | MSCI Emerging Markets ESG Leaders Index |
MSCI Emerging Markets Index | |||||
| One Year |
20.32% | 20.76% | 20.55% | 14.49% | ||||
| Since Inception1 |
20.12% | 20.46% | 20.87% | 13.57% | ||||
1 Total returns are calculated based on the commencement of operations, December 6, 2018 (“Inception”).
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.Xtrackers.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the sale of fund shares or redemption of fund creation units. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are sold in the market or redeemed. Performance for certain funds may reflect a waiver of a portion of the unitary advisory fee. Without such waiver, performance would have been lower. The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated December 20, 2019, was 0.20%, and may differ from the expense ratio disclosed in the Financial Highlights table in this report.
The Fund’s net asset value or “NAV” is calculated by dividing the value of the Fund’s total assets less total liabilities by the number of shares outstanding. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
9
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (EMSG) (Continued)
* As a percent of total investments excluding exchange-traded funds, securities lending collateral and cash equivalents.
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund’s investment portfolio see page 34.
10
Performance Summary (Unaudited)
Xtrackers MSCI USA ESG Leaders Equity ETF (USSG)
Xtrackers MSCI USA ESG Leaders Equity ETF (the “Fund”), using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI USA ESG Leaders Index (the “Underlying Index”). The Underlying Index is a capitalization weighted index that provides exposure to companies with high environmental, social and governance (“ESG”) performance relative to their sector peers and consists of large- and medium-capitalization companies in the U.S. market. The S&P 500 Index or the Standard & Poor’s 500 Index is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies. It is not possible to invest directly into an index.
| Performance as of August 31, 2020 |
| Average Annual Total Return | ||||||||
| Net Asset Value | Market Value | MSCI USA ESG Leaders Index |
S&P 500 Index | |||||
| One Year |
21.42% | 21.43% | 21.52% | 21.94% | ||||
| Since Inception1 |
19.41% | 19.32% | 19.47% | 19.26% | ||||
| Cumulative Total Returns | ||||||||
| Net Asset Value | Market Value | MSCI USA ESG Leaders Index |
S&P 500 Index | |||||
| One Year |
21.42% | 21.43% | 21.52% | 21.94% | ||||
| Since Inception1 |
30.19% | 30.11% | 30.37% | 30.02% | ||||
1 Total returns are calculated based on the commencement of operations, March 7, 2019 (“Inception”).
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.Xtrackers.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the sale of fund shares or redemption of fund creation units. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are sold in the market or redeemed. Performance for certain funds may reflect a waiver of a portion of the unitary advisory fee. Without such waiver, performance would have been lower. The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated December 20, 2019, was 0.10%, and may differ from the expense ratio disclosed in the Financial Highlights table in this report.
The Fund’s net asset value or “NAV” is calculated by dividing the value of the Fund’s total assets less total liabilities by the number of shares outstanding. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
11
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers MSCI USA ESG Leaders Equity ETF (USSG) (Continued)
* As a percent of total investments excluding securities lending collateral and cash equivalents.
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund’s investment portfolio see page 41.
12
DBX ETF Trust
Xtrackers S&P 500 ESG ETF (SNPE)
Xtrackers S&P 500 ESG ETF (the “Fund”), using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the S&P 500 ESG Index (the “Underlying Index”). The Underlying Index is a broad-based, market capitalization weighted index that provides exposure to companies with high environmental, social and governance (“ESG”) performance relative to their sector peers, while maintaining similar overall industry group weights as the S&P 500 Index. It is not possible to invest directly into an index.
| Performance as of August 31, 2020 |
| Average Annual Total Return | ||||||||
| Net Asset Value | Market Value | S&P 500 ESG Index |
S&P 500 Index | |||||
| One Year |
25.71% | 25.71% | 25.90% | 21.94% | ||||
| Since Inception1 |
22.56% | 22.50% | 22.68% | 18.88% | ||||
| Cumulative Total Returns | ||||||||
| Net Asset Value | Market Value | S&P 500 ESG Index |
S&P 500 Index | |||||
| One Year |
25.71% | 25.71% | 25.90% | 21.94% | ||||
| Since Inception1 |
27.22% | 27.22% | 27.44% | 22.77% | ||||
1 Total returns are calculated based on the commencement of operations, June 26, 2019 (“Inception”).
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.Xtrackers.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the sale of fund shares or redemption of fund creation units. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are sold in the market or redeemed. Performance for certain funds may reflect a waiver of a portion of the unitary advisory fee. Without such waiver, performance would have been lower. The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated December 20, 2019, as supplemented July 28, 2020 was 0.11%, and may differ from the expense ratio disclosed in the Financial Highlights table in this report.
The Fund’s net asset value or “NAV” is calculated by dividing the value of the Fund’s total assets less total liabilities by the number of shares outstanding. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
13
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers S&P 500 ESG ETF (SNPE) (Continued)
* As a percent of total investments excluding securities lending collateral and cash equivalents.
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund’s investment portfolio see page 46.
14
Fees and Expenses (Unaudited)
As a shareholder of one or more of the Funds, you incur two types of costs: (1) transaction costs, including brokerage commissions paid on purchases and sales of fund shares, and (2) ongoing costs, including unitary advisory fees and other Fund expenses. In the most recent six-month period the Funds limited these expenses; had they not done so, expenses would have been higher. The expense examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds.
The examples in the tables are based on an investment of $1,000 invested at the beginning of the period and held for the entire period (March 1, 2020 to August 31, 2020).
Actual expenses
The first line in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The second line in the following tables provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses (which is not the Funds’ actual return). The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only, and do not reflect any transactional costs. Therefore the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value March 1, 2020 |
Ending Account Value August 31, 2020 |
Annualized Expense Ratio |
Expenses Paid During the Period Per $1,000(1) |
|||||||||||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
|
|||||||||||||||
| Actual |
$ | 1,000.00 | $ | 1,111.20 | 0.16 | % | $ | 0.85 | ||||||||
| Hypothetical (5% return before expenses) |
$ | 1,000.00 | $ | 1,024.33 | 0.16 | % | $ | 0.81 | ||||||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
|
|||||||||||||||
| Actual |
$ | 1,000.00 | $ | 1,089.70 | 0.14 | % | $ | 0.74 | ||||||||
| Hypothetical (5% return before expenses) |
$ | 1,000.00 | $ | 1,024.43 | 0.14 | % | $ | 0.71 | ||||||||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
|
|||||||||||||||
| Actual |
$ | 1,000.00 | $ | 1,161.10 | 0.20 | % | $ | 1.09 | ||||||||
| Hypothetical (5% return before expenses) |
$ | 1,000.00 | $ | 1,024.13 | 0.20 | % | $ | 1.02 | ||||||||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
|
|||||||||||||||
| Actual |
$ | 1,000.00 | $ | 1,178.90 | 0.09 | % | $ | 0.49 | ||||||||
| Hypothetical (5% return before expenses) |
$ | 1,000.00 | $ | 1,024.68 | 0.09 | % | $ | 0.46 | ||||||||
| Xtrackers S&P 500 ESG ETF |
|
|||||||||||||||
| Actual |
$ | 1,000.00 | $ | 1,223.10 | 0.11 | % | $ | 0.61 | ||||||||
| Hypothetical (5% return before expenses) |
$ | 1,000.00 | $ | 1,024.58 | 0.11 | % | $ | 0.56 | ||||||||
(1) Expenses are equal to each Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 (the number of days in the most recent six-month period), then divided by 366.
15
Schedule of Investments
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF
August 31, 2020
| See Notes to Financial Statements. | 16 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 17 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 18 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 19 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 20 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 21 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 22 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 23 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 24 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (Continued)
August 31, 2020
A summary of the Fund’s transactions with affiliated investments during the year ended August 31, 2020 is as follows:
| Value ($) at 8/31/2019 |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/(Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital Gain Distributions ($) |
Number of Shares at 8/31/2020 |
Value ($) at 8/31/2020 |
||||||||||||||||||||||||||||
| EXCHANGE-TRADED FUNDS — 0.2% |
| |||||||||||||||||||||||||||||||||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF (d) |
| |||||||||||||||||||||||||||||||||||
| 2,415 | 115,960 | (111,725 | ) | 4,471 | 1,182 | 209 | — | 475 | 12,303 | |||||||||||||||||||||||||||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (d) |
| |||||||||||||||||||||||||||||||||||
| — | 40,667 | (36,891 | ) | 1,057 | 905 | 116 | — | 200 | 5,738 | |||||||||||||||||||||||||||
| SECURITIES LENDING COLLATERAL — 0.2% |
| |||||||||||||||||||||||||||||||||||
| DWS Government & Agency Securities Portfolio “DWS Government Cash Institutional Shares”, 0.04% (e)(f) |
| |||||||||||||||||||||||||||||||||||
| 51,069 | — | (32,518 | )(g) | — | — | 601 | — | 18,551 | 18,551 | |||||||||||||||||||||||||||
| CASH EQUIVALENTS — 0.1% |
| |||||||||||||||||||||||||||||||||||
| DWS Government Money Market Series “Institutional Shares”, 0.06% (e) |
| |||||||||||||||||||||||||||||||||||
| 6,580 | 390,480 | (391,033 | ) | — | — | 99 | — | 6,027 | 6,027 | |||||||||||||||||||||||||||
|
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|
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|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| 60,064 | 547,107 | (572,167 | ) | 5,528 | 2,087 | 1,025 | — | 25,253 | 42,619 | |||||||||||||||||||||||||||
|
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|
|||||||||||||||||||
| * | Non-income producing security. |
| (a) | Stapled Security — A security contractually bound to one or more other securities to form a single saleable unit which cannot be sold separately. |
| (b) | All or a portion of these securities were on loan. In addition, “Other assets and liabilities, net” may include pending sales that are also on loan. The value of securities loaned at August 31, 2020 amounted to $39,489, which is 0.5% of net assets. |
| (c) | Investment was valued using significant unobservable inputs. |
| (d) | Affiliated fund advised by DBX Advisors LLC. |
| See Notes to Financial Statements. | 25 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF (Continued)
August 31, 2020
| (e) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (f) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $23,446. |
| (g) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the year ended August 31, 2020. |
| ADR: | American Depositary Receipt |
| CPO: | Ordinary Participation Certificates |
| GDR: | Global Depositary Receipt |
| JSC: | Joint Stock Company |
| NVDR: | Non Voting Depositary Receipt |
| PJSC: | Public Joint Stock Company |
| PSQC | Public Shareholders Qatari Company |
| QPSC: | Qatari Public Shareholders Company |
| REIT: | Real Estate Investment Trust |
| SAE: | Societe Anonyme Egyptienne |
| 144A: | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
Securities are listed in country of domicile.
At August 31, 2020, open futures contracts purchased were as follows:
| Contract Description |
Currency | Number of Contracts |
Notional Amount |
Contract Value |
Expiration Date |
Unrealized Appreciation |
||||||||||||||||||
| MSCI Emerging Markets Index Futures |
USD | 1 | $ | 49,365 | $ | 55,020 | 9/18/2020 | $ | 5,655 | |||||||||||||||
For information on the Fund’s policy and additional disclosures regarding open futures contracts, please refer to the Derivatives section of Note 2 in the accompanying Notes to Financial Statements.
Currency Abbreviations
| USD | U.S. Dollar |
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2020 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.
| Assets |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks (h) |
$ | 8,221,976 | $ | — | $ | 0 | $ | 8,221,976 | ||||||||
| Preferred Stocks (h) |
73,074 | — | — | 73,074 | ||||||||||||
| Rights (h) |
— | 143 | — | 143 | ||||||||||||
| Warrants |
36 | — | — | 36 | ||||||||||||
| Exchange-Traded Funds |
18,041 | — | — | 18,041 | ||||||||||||
| Short-Term Investments (h) |
24,578 | — | — | 24,578 | ||||||||||||
| Derivatives (i) |
||||||||||||||||
| Futures Contracts |
5,655 | — | — | 5,655 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL |
$ | 8,343,360 | $ | 143 | $ | 0 | $ | 8,343,503 | ||||||||
|
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|
|
|||||||||
| (h) | See Schedule of Investments for additional detailed categorizations. |
| (i) | Derivatives include unrealized appreciation (depreciation) on open futures contracts. |
During the period ended August 31, 2020, the amount of transfers between Level 1 and Level 3 was $2,316. The investments were transferred from Level 1 to Level 3 due to the lack of observable market data due to a decrease in market activity.
| See Notes to Financial Statements. | 26 |
Schedule of Investments
Xtrackers MSCI EAFE ESG Leaders Equity ETF
August 31, 2020
| See Notes to Financial Statements. | 27 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI EAFE ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 28 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI EAFE ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 29 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI EAFE ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 30 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI EAFE ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 31 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI EAFE ESG Leaders Equity ETF (Continued)
August 31, 2020
A summary of the Fund’s transactions with affiliated investments during the year ended August 31, 2020 is as follows:
| Value ($) at 8/31/2019 |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/(Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital Gain Distributions ($) |
Number of Shares at 8/31/2020 |
Value ($) at 8/31/2020 |
||||||||||||||||||||||||||||
| SECURITIES LENDING COLLATERAL — 0.5% |
|
|||||||||||||||||||||||||||||||||||
| DWS Government & Agency Securities Portfolio “DWS Government Cash Institutional Shares”, 0.04% (d)(e) |
|
|||||||||||||||||||||||||||||||||||
| 42,850 | 12,450(f | ) | — | — | — | 577 | — | 55,300 | 55,300 | |||||||||||||||||||||||||||
| CASH EQUIVALENTS — 0.0% |
|
|||||||||||||||||||||||||||||||||||
| DWS Government Money Market Series “Institutional Shares”, 0.06% (d) |
|
|||||||||||||||||||||||||||||||||||
| 2,055 | 358,488 | (360,400 | ) | — | — | 65 | — | 143 | 143 | |||||||||||||||||||||||||||
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|
|||||||||||||||||||
| 44,905 | 370,938 | (360,400 | ) | — | — | 642 | — | 55,443 | 55,443 | |||||||||||||||||||||||||||
|
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|||||||||||||||||||
| * | Non-income producing security. |
| (a) | Stapled Security — A security contractually bound to one or more other securities to form a single saleable unit which cannot be sold separately. |
| (b) | All or a portion of these securities were on loan. In addition, “Other assets and liabilities, net” may include pending sales that are also on loan. The value of securities loaned at August 31, 2020 amounted to $89,209, which is 0.8% of net assets. |
| (c) | Investment was valued using significant unobservable inputs. |
| (d) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (e) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $39,060. |
| (f) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the year ended August 31, 2020. |
| REIT: | Real Estate Investment Trust |
| 144A: | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
Securities are listed in country of domicile.
At August 31, 2020, open futures contracts purchased were as follows:
| Contract Description |
Currency | Number of Contracts |
Notional Amount |
Contract Value |
Expiration Date |
Unrealized Depreciation |
||||||||||||
| MINI Topix Index Futures |
JPY | 1 | $ | 15,327 | $ | 15,239 | 9/10/2020 | $ | (88 | ) | ||||||||
For information on the Fund’s policy and additional disclosures regarding open futures contracts, please refer to the Derivatives section of Note 2 in the accompanying Notes to Financial Statements.
Currency Abbreviations
| JPY | Japanese Yen |
| See Notes to Financial Statements. | 32 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI EAFE ESG Leaders Equity ETF (Continued)
August 31, 2020
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2020 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.
| Assets |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks (g) |
$ | 11,557,040 | $ | — | $ | 0 | $ | 11,557,040 | ||||||||
| Preferred Stocks |
59,245 | — | — | 59,245 | ||||||||||||
| Rights |
— | 310 | — | 310 | ||||||||||||
| Exchange-Traded Funds |
24,681 | — | — | 24,681 | ||||||||||||
| Short-Term Investments (g) |
55,443 | — | — | 55,443 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL |
$ | 11,696,409 | $ | 310 | $ | 0 | $ | 11,696,719 | ||||||||
|
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|
|||||||||
| Liabilities |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Derivatives (h) |
||||||||||||||||
| Futures Contracts |
$ | (88 | ) | $ | — | $ | — | $ | (88 | ) | ||||||
|
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|
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|
|||||||||
| TOTAL |
$ | (88 | ) | $ | — | $ | — | $ | (88 | ) | ||||||
|
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|
|||||||||
| (g) | See Schedule of Investments for additional detailed categorizations. |
| (h) | Derivatives include unrealized appreciation (depreciation) on open futures contracts. |
During the year ended Aug 31, 2020, the amount of transfers from Level 1 to Level 3 was $3,291. The investments were transferred from Level 1 to Level 3 due to the lack of observable market data due to a decrease in market activity.
| See Notes to Financial Statements. | 33 |
Schedule of Investments
Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF
August 31, 2020
| See Notes to Financial Statements. | 34 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 35 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 36 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 37 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 38 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (Continued)
August 31, 2020
A summary of the Fund’s transactions with affiliated investments during the year ended August 31, 2020 is as follows:
| Value ($) at 8/31/2019 |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/(Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital Gain Distributions ($) |
Number of Shares at 8/31/2020 |
Value ($) at 8/31/2020 |
||||||||||||||||||||||||||||
| SECURITIES LENDING COLLATERAL — 0.3% |
| |||||||||||||||||||||||||||||||||||
| DWS Government & Agency Securities Portfolio “DWS Government Cash Institutional Shares”, 0.04% (b)(c) |
| |||||||||||||||||||||||||||||||||||
| 130,104 | — | (100,629 | )(d) | — | — | 762 | — | 29,475 | 29,475 | |||||||||||||||||||||||||||
| CASH EQUIVALENTS — 0.4% |
| |||||||||||||||||||||||||||||||||||
| DWS Government Money Market Series “Institutional Shares”, 0.06% (b) |
| |||||||||||||||||||||||||||||||||||
| 16,016 | 523,062 | (506,978 | ) | — | — | 373 | — | 32,100 | 32,100 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| 146,120 | 523,062 | (607,607 | ) | — | — | 1,135 | — | 61,575 | 61,575 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| * | Non-income producing security. |
| (a) | All or a portion of these securities were on loan. In addition, “Other assets and liabilities, net” may include pending sales that are also on loan. The value of securities loaned at August 31, 2020 amounted to $53,443, which is 0.6% of net assets. |
| (b) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (c) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $27,254. |
| (d) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the year ended August 31, 2020. |
| See Notes to Financial Statements. | 39 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF (Continued)
August 31, 2020
| ADR: | American Depositary Receipt |
| CPO: | Ordinary Participation Certificates |
| GDR: | Global Depositary Receipt |
| JSC: | Joint Stock Company |
| NVDR: | Non Voting Depositary Receipt |
| PJSC: | Public Joint Stock Company |
| PSQC | Public Shareholders Qatari Company |
| QPSC: | Qatari Public Shareholders Company |
| QSC: | Qatari Shareholders Company |
| REIT: | Real Estate Investment Trust |
| SAE: | Societe Anonyme Egyptienne |
| 144A: | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
Securities are listed in country of domicile.
At August 31, 2020, open futures contracts purchased were as follows:
| Contract Description |
Currency | Number of Contracts |
Notional Amount |
Contract Value |
Expiration Date |
Unrealized Appreciation |
||||||||||||
| MSCI Emerging Markets Index Futures |
USD | 1 | $ | 49,365 | $55,020 | 9/18/2020 | $ | 5,655 | ||||||||||
For information on the Fund’s policy and additional disclosures regarding open futures contracts, please refer to the Derivatives section of Note 2 in the accompanying Notes to Financial Statements.
Currency Abbreviations
| INR | Indian Rupee |
| USD | U.S. Dollar |
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2020 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.
| Assets |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks (e) |
$ | 8,352,302 | $ | — | $ | — | $ | 8,352,302 | ||||||||
| Preferred Stocks (e) |
146,857 | — | — | 146,857 | ||||||||||||
| Corporate Bonds |
— | 65 | — | 65 | ||||||||||||
| Rights |
— | 29 | — | 29 | ||||||||||||
| Warrants |
171 | — | — | 171 | ||||||||||||
| Exchange-Traded Funds |
18,417 | — | — | 18,417 | ||||||||||||
| Short-Term Investments (e) |
61,575 | — | — | 61,575 | ||||||||||||
| Derivatives (f) |
||||||||||||||||
| Futures Contracts |
5,655 | — | — | 5,655 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL |
$ | 8,584,977 | $ | 94 | $ | — | $ | 8,585,071 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (e) | See Schedule of Investments for additional detailed categorizations. |
| (f) | Derivatives include unrealized appreciation (depreciation) on open futures contracts. |
During the year ended Aug 31, 2020, the amount of transfers from Level 3 to Level 2 was $1. The investments were transferred from Level 3 to Level 2 due to the availability of a pricing source supported by observable inputs.
| See Notes to Financial Statements. | 40 |
Schedule of Investments
Xtrackers MSCI USA ESG Leaders Equity ETF
August 31, 2020
| See Notes to Financial Statements. | 41 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI USA ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 42 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI USA ESG Leaders Equity ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 43 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI USA ESG Leaders Equity ETF (Continued)
August 31, 2020
A summary of the Fund’s transactions with affiliated investments during the year ended August 31, 2020 is as follows:
| Value ($) at 8/31/2019 |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/(Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital Gain Distributions ($) |
Number of Shares at 8/31/2020 |
Value ($) at 8/31/2020 |
||||||||||||||||||||||||||||
| SECURITIES LENDING COLLATERAL — 0.0% |
| |||||||||||||||||||||||||||||||||||
| DWS Government & Agency Securities Portfolio “DWS Government Cash Institutional Shares”, 0.04% (b)(c) |
| |||||||||||||||||||||||||||||||||||
| 719,723 | — | (624,130 | )(d) | — | — | 8,393 | — | 95,593 | 95,593 | |||||||||||||||||||||||||||
| CASH EQUIVALENTS — 0.1% |
| |||||||||||||||||||||||||||||||||||
| DWS Government Money Market Series “Institutional Shares”, 0.06% (b) |
| |||||||||||||||||||||||||||||||||||
| 2,902,467 | 47,824,287 | (48,625,275 | ) | — | — | 33,962 | — | 2,101,479 | 2,101,479 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| 3,622,190 | 47,824,287 | (49,249,405 | ) | — | — | 42,355 | — | 2,197,072 | 2,197,072 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| * | Non-income producing security. |
| (a) | All or a portion of these securities were on loan. In addition, “Other assets and liabilities, net” may include pending sales that are also on loan. The value of securities loaned at August 31, 2020 amounted to $19,911,586, which is 0.7% of net assets. |
| (b) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (c) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $20,512,155. |
| (d) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the year ended August 31, 2020. |
| REIT: | Real Estate Investment Trust |
At August 31, 2020, open futures contracts purchased were as follows:
| Contract Description |
Currency | Number of Contracts |
Notional Amount |
Contract Value |
Expiration Date |
Unrealized Appreciation (Depreciation) |
||||||||||||
| E-Mini S&P MidCap 400 Futures |
USD | 2 | $ | 387,380 | $ | 385,160 | 9/18/2020 | $ | (2,220 | ) | ||||||||
| E-Mini S&P 500 ESG Futures |
USD | 16 | 2,291,370 | 2,410,560 | 9/18/2020 | 119,190 | ||||||||||||
| E-Mini S&P 500 Futures |
USD | 18 | 2,955,900 | 3,149,010 | 9/18/2020 | 193,110 | ||||||||||||
|
|
|
|||||||||||||||||
| Total net unrealized appreciation |
$ | 310,080 | ||||||||||||||||
|
|
|
|||||||||||||||||
For information on the Fund’s policy and additional disclosures regarding open futures contracts, please refer to the Derivatives section of Note 2 in the accompanying Notes to Financial Statements.
Currency Abbreviations
| USD | U.S. Dollar |
| See Notes to Financial Statements. | 44 |
DBX ETF Trust
Schedule of Investments
Xtrackers MSCI USA ESG Leaders Equity ETF (Continued)
August 31, 2020
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2020 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.
| Assets |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks (e) |
$ | 2,659,897,967 | $ | — | $ | — | $ | 2,659,897,967 | ||||||||
| Short-Term Investments (e) |
2,197,072 | — | — | 2,197,072 | ||||||||||||
| Derivatives (f) |
||||||||||||||||
| Futures Contracts |
312,300 | — | — | 312,300 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL |
$ | 2,662,407,339 | $ | — | $ | — | $ | 2,662,407,339 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Liabilities |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Derivatives (f) |
||||||||||||||||
| Futures Contracts |
$ | (2,220 | ) | $ | — | $ | — | $ | (2,220 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL |
$ | (2,220 | ) | $ | — | $ | — | $ | (2,220 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (e) | See Schedule of Investments for additional detailed categorizations. |
| (f) | Derivatives include unrealized appreciation (depreciation) on open futures contracts. |
| See Notes to Financial Statements. | 45 |
Schedule of Investments
Xtrackers S&P 500 ESG ETF
August 31, 2020
| See Notes to Financial Statements. | 46 |
DBX ETF Trust
Schedule of Investments
Xtrackers S&P 500 ESG ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 47 |
DBX ETF Trust
Schedule of Investments
Xtrackers S&P 500 ESG ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 48 |
DBX ETF Trust
Schedule of Investments
Xtrackers S&P 500 ESG ETF (Continued)
August 31, 2020
A summary of the Fund’s transactions with affiliated investments during the year ended August 31, 2020 is as follows:
| Value ($) at 8/31/2019 |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/(Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital Gain Distributions ($) |
Number of Shares at 8/31/2020 |
Value ($) at 8/31/2020 |
||||||||||||||||||||||||||||
| SECURITIES LENDING COLLATERAL — 0.0% |
| |||||||||||||||||||||||||||||||||||
| DWS Government & Agency Securities Portfolio “DWS Government Cash Institutional Shares”, 0.04% (b)(c) |
| |||||||||||||||||||||||||||||||||||
| 4,434 | 79,762(d | ) | — | — | — | 386 | — | 84,196 | 84,196 | |||||||||||||||||||||||||||
| CASH EQUIVALENTS — 0.1% |
| |||||||||||||||||||||||||||||||||||
| DWS Government Money Market Series “Institutional Shares”, 0.06% (b) |
| |||||||||||||||||||||||||||||||||||
| 5,888 | 4,111,316 | (3,772,407 | ) | — | — | 2,314 | — | 344,797 | 344,797 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| 10,322 | 4,191,078 | (3,772,407 | ) | — | — | 2,700 | — | 428,993 | 428,993 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| * | Non-income producing security. |
| (a) | All or a portion of these securities were on loan. In addition, “Other assets and liabilities, net” may include pending sales that are also on loan. The value of securities loaned at August 31, 2020 amounted to $3,671,917, which is 1.4% of net assets. |
| (b) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (c) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $3,733,742. |
| (d) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the year ended August 31, 2020. |
| REIT: | Real Estate Investment Trust |
At August 31, 2020, open futures contracts purchased were as follows:
| Contract Description |
Currency | Number of Contracts |
Notional Amount |
Contract Value |
Expiration Date |
Unrealized Appreciation |
||||||||||||
| E-Mini S&P 500 ESG Futures |
USD | 4 | $ | 552,380 | $602,640 | 9/18/2020 | $ | 50,260 | ||||||||||
For information on the Fund’s policy and additional disclosures regarding open futures contracts, please refer to the Derivatives section of Note 2 in the accompanying Notes to Financial Statements.
Currency Abbreviations
| USD | U.S. Dollar |
| See Notes to Financial Statements. | 49 |
DBX ETF Trust
Schedule of Investments
Xtrackers S&P 500 ESG ETF (Continued)
August 31, 2020
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2020 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.
| Assets |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stocks (e) |
$ | 269,719,421 | $ | — | $ | — | $ | 269,719,421 | ||||||||
| Short-Term Investments (e) |
428,993 | — | — | 428,993 | ||||||||||||
| Derivatives (f) |
||||||||||||||||
| Futures Contracts |
50,260 | — | — | 50,260 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL |
$ | 270,198,674 | $ | — | $ | — | $ | 270,198,674 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (e) | See Schedule of Investments for additional detailed categorizations. |
| (f) | Derivatives include unrealized appreciation (depreciation) on open futures contracts. |
| See Notes to Financial Statements. | 50 |
Statements of Assets and Liabilities
August 31, 2020
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
Xtrackers MSCI EAFE ESG Leaders Equity ETF |
Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
Xtrackers MSCI USA ESG Leaders Equity ETF |
|||||||||||||
| Assets |
||||||||||||||||
| Investment in non-affiliated securities at value |
$ | 8,295,229 | $ | 11,641,276 | $ | 8,517,841 | $ | 2,659,897,967 | ||||||||
| Investment in affiliated securities at value |
18,041 | — | — | — | ||||||||||||
| Investment in DWS Government Money Market Series |
6,027 | 143 | 32,100 | 2,101,479 | ||||||||||||
| Investment in DWS Government & Agency Securities Portfolio* |
18,551 | 55,300 | 29,475 | 95,593 | ||||||||||||
| Foreign currency at value |
39,215 | 5,665 | 28,697 | — | ||||||||||||
| Deposit with broker for futures contracts |
5,300 | 655 | 5,300 | 403,000 | ||||||||||||
| Receivables: | ||||||||||||||||
| Investment securities sold |
37,908 | 28,462 | 79,244 | 7,333,854 | ||||||||||||
| Variation margin on futures contracts |
— | 114 | — | — | ||||||||||||
| Dividends |
14,308 | 25,007 | 6,185 | 4,037,623 | ||||||||||||
| Interest |
— | — | 1 | — | ||||||||||||
| Securities lending income |
59 | 71 | 44 | 2,899 | ||||||||||||
| Foreign tax reclaim |
6,536 | 11,494 | 292 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total assets |
$ | 8,441,174 | $ | 11,768,187 | $ | 8,699,179 | $ | 2,673,872,415 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Liabilities |
||||||||||||||||
| Payable upon return of securities loaned |
18,551 | 55,300 | 29,475 | 95,593 | ||||||||||||
| Payables: | ||||||||||||||||
| Investment securities purchased |
46,692 | 31,002 | 92,127 | 7,024,536 | ||||||||||||
| Investment advisory fees |
1,078 | 1,366 | 1,437 | 192,916 | ||||||||||||
| Variation margin on futures contracts |
1,240 | — | 1,240 | 114,492 | ||||||||||||
| Deferred foreign tax payable |
2,687 | — | 4,438 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total liabilities |
70,248 | 87,668 | 128,717 | 7,427,537 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Assets, at value |
$ | 8,370,926 | $ | 11,680,519 | $ | 8,570,462 | $ | 2,666,444,878 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Assets Consist of |
||||||||||||||||
| Paid-in capital |
$ | 7,501,563 | $ | 11,136,256 | $ | 7,485,979 | $ | 2,227,937,535 | ||||||||
| Distributable earnings (loss) |
869,363 | 544,263 | 1,084,483 | 438,507,343 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Assets, at value |
$ | 8,370,926 | $ | 11,680,519 | $ | 8,570,462 | $ | 2,666,444,878 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Number of Common Shares outstanding |
300,001 | 450,001 | 300,001 | 83,750,001 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Asset Value |
$ | 27.90 | $ | 25.96 | $ | 28.57 | $ | 31.84 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Investment in non-affiliated securities at cost |
$ | 7,415,221 | $ | 10,906,575 | $ | 7,287,005 | $ | 2,203,855,873 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Investment in affiliated securities at cost |
$ | 15,892 | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Value of securities loaned |
$ | 39,489 | $ | 89,209 | $ | 53,443 | $ | 19,911,586 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Investment in DWS Government Money Market Series at cost |
$ | 6,027 | $ | 143 | $ | 32,100 | $ | 2,101,479 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Investment in DWS Government & Agency Securities Portfolio at cost* |
$ | 18,551 | $ | 55,300 | $ | 29,475 | $ | 95,593 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-cash collateral for securities on loan |
$ | 23,446 | $ | 39,060 | $ | 27,254 | $ | 20,512,155 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Foreign currency at cost |
$ | 38,107 | $ | 5,249 | $ | 28,689 | $ | — | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| * | Represents collateral on securities loaned. |
| See Notes to Financial Statements. | 51 |
DBX ETF Trust
Statements of Assets and Liabilities (Continued)
August 31, 2020
| Xtrackers S&P 500 ESG ETF |
||||
| Assets |
||||
| Investment in non-affiliated securities at value |
$ | 269,719,421 | ||
| Investment in DWS Government Money Market Series |
344,797 | |||
| Investment in DWS Government & Agency Securities Portfolio* |
84,196 | |||
| Deposit with broker for futures contracts |
40,000 | |||
| Receivables: | ||||
| Dividends |
352,523 | |||
| Interest |
24 | |||
| Securities lending income |
417 | |||
|
|
|
|||
| Total assets |
$ | 270,541,378 | ||
|
|
|
|||
| Liabilities |
||||
| Payable upon return of securities loaned |
84,196 | |||
| Payables: | ||||
| Investment advisory fees |
21,251 | |||
| Variation margin on futures contracts |
1,080 | |||
|
|
|
|||
| Total liabilities |
106,527 | |||
|
|
|
|||
| Net Assets, at value |
$ | 270,434,851 | ||
|
|
|
|||
| Net Assets Consist of |
||||
| Paid-in capital |
$ | 233,833,890 | ||
| Distributable earnings (loss) |
36,600,961 | |||
|
|
|
|||
| Net Assets, at value |
$ | 270,434,851 | ||
|
|
|
|||
| Number of Common Shares outstanding |
8,700,001 | |||
|
|
|
|||
| Net Asset Value |
$ | 31.08 | ||
|
|
|
|||
| Investment in non-affiliated securities at cost |
$ | 232,578,297 | ||
|
|
|
|||
| Value of securities loaned |
$ | 3,671,917 | ||
|
|
|
|||
| Investment in DWS Government Money Market Series at cost |
$ | 344,797 | ||
|
|
|
|||
| Investment in DWS Government & Agency Securities Portfolio at cost* |
$ | 84,196 | ||
|
|
|
|||
| Non-cash collateral for securities on loan |
$ | 3,733,742 | ||
|
|
|
|||
| * | Represents collateral on securities loaned. |
| See Notes to Financial Statements. | 52 |
Statements of Operations
For the Year Ended August 31, 2020
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
Xtrackers MSCI EAFE ESG Leaders Equity ETF |
Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
Xtrackers MSCI USA ESG Leaders Equity ETF |
|||||||||||||
| Investment Income |
||||||||||||||||
| Unaffiliated dividend income* |
$ | 181,423 | $ | 241,231 | $ | 166,255 | $ | 34,553,636 | ||||||||
| Affiliated dividend income |
325 | — | — | — | ||||||||||||
| Income distributions from affiliated funds |
99 | 65 | 373 | 33,962 | ||||||||||||
| Affiliated securities lending income |
601 | 577 | 762 | 8,393 | ||||||||||||
| Unaffiliated non-cash dividend income |
32,225 | — | 105,760 | — | ||||||||||||
| Unaffiliated securities lending income, net of borrower rebates |
972 | 777 | 240 | 40,326 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total investment income |
215,645 | 242,650 | 273,390 | 34,636,317 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Expenses |
||||||||||||||||
| Investment advisory fees |
12,466 | 13,409 | 15,287 | 1,806,467 | ||||||||||||
| Other expenses |
43 | 57 | 43 | 30 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total expenses |
12,509 | 13,466 | 15,330 | 1,806,497 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Less fees waived (see note 3): |
||||||||||||||||
| Waiver |
(49 | ) | (4 | ) | (24 | ) | (183,039 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net expenses |
12,460 | 13,462 | 15,306 | 1,623,458 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net investment income (loss) |
203,185 | 229,188 | 258,084 | 33,012,859 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Realized and Unrealized Gain (Loss) |
||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments** |
(50,212 | ) | (181,079 | ) | (174,161 | ) | (22,951,284 | ) | ||||||||
| Investments in affiliates |
5,528 | — | — | — | ||||||||||||
| In-kind redemptions |
— | — | — | 28,636,308 | ||||||||||||
| Futures contracts |
(1,845 | ) | 5,578 | 10,322 | (1,192,367 | ) | ||||||||||
| Foreign currency transactions |
(1,725 | ) | 473 | (761 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net realized gain (loss) |
(48,254 | ) | (175,028 | ) | (164,600 | ) | 4,492,657 | |||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
| Investments*** |
796,238 | 987,660 | 1,378,716 | 385,971,175 | ||||||||||||
| Investments in affiliates |
2,087 | — | — | — | ||||||||||||
| Futures contracts |
8,050 | (22 | ) | 6,820 | 294,392 | |||||||||||
| Foreign currency translations |
2,125 | 1,934 | 223 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net change in unrealized appreciation (depreciation) |
808,500 | 989,572 | 1,385,759 | 386,265,567 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net realized and unrealized gain (loss) on investments, futures and foreign currency transactions |
760,246 | 814,544 | 1,221,159 | 390,758,224 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Increase (Decrease) in Net Assets Resulting from Operations |
$ | 963,431 | $ | 1,043,732 | $ | 1,479,243 | $ | 423,771,083 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| * Unaffiliated foreign tax withheld |
$ | 26,284 | $ | 29,556 | $ | 22,233 | $ | — | ||||||||
| ** Net of foreign taxes |
$ | 128 | $ | — | $ | — | $ | — | ||||||||
| *** Net of change in deferred foreign taxes |
$ | 2,687 | $ | — | $ | 4,438 | $ | — | ||||||||
| See Notes to Financial Statements. | 53 |
DBX ETF Trust
Statements of Operations (Continued)
For the Year Ended August 31, 2020
| Xtrackers S&P 500 ESG ETF |
||||
| Investment Income |
||||
| Unaffiliated dividend income* |
$ | 2,479,316 | ||
| Income distributions from affiliated funds |
2,314 | |||
| Affiliated securities lending income |
386 | |||
| Unaffiliated securities lending income, net of borrower rebates |
4,542 | |||
|
|
|
|||
| Total investment income |
2,486,558 | |||
|
|
|
|||
| Expenses |
||||
| Investment advisory fees |
138,972 | |||
| Other expenses |
30 | |||
|
|
|
|||
| Total expenses |
139,002 | |||
|
|
|
|||
| Less fees waived (see note 3): |
||||
| Waiver |
(2,593 | ) | ||
|
|
|
|||
| Net expenses |
136,409 | |||
|
|
|
|||
| Net investment income (loss) |
2,350,149 | |||
|
|
|
|||
| Realized and Unrealized Gain (Loss) |
||||
| Net realized gain (loss) from: |
||||
| Investments |
(1,360,859 | ) | ||
| In-kind redemptions |
2,142,356 | |||
| Futures contracts |
(35,753 | ) | ||
|
|
|
|||
| Net realized gain (loss) |
745,744 | |||
| Net change in unrealized appreciation (depreciation) on: |
||||
| Investments |
37,052,660 | |||
| Futures contracts |
50,260 | |||
|
|
|
|||
| Net change in unrealized appreciation (depreciation) |
37,102,920 | |||
|
|
|
|||
| Net realized and unrealized gain (loss) on investments and futures |
37,848,664 | |||
|
|
|
|||
| Net Increase (Decrease) in Net Assets Resulting from Operations |
$ | 40,198,813 | ||
|
|
|
|||
| * Unaffiliated foreign tax withheld |
$ | 493 | ||
| See Notes to Financial Statements. | 54 |
Statements of Changes in Net Assets
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
Xtrackers MSCI EAFE ESG Leaders Equity ETF |
|||||||||||||||
| Year Ended August 31, 2020 |
For the Period December 6, 2018(1) to August 31, 2019 |
Year Ended August 31, 2020 |
For the Period September 6, 2018(1) to August 31, 2019 |
|||||||||||||
| Increase (Decrease) in Net Assets from Operations |
||||||||||||||||
| Net investment income (loss) |
$ | 203,185 | $ | 179,629 | $ | 229,188 | $ | 232,575 | ||||||||
| Net realized gain (loss) |
(48,254 | ) | 2,102 | (175,028 | ) | (53,873 | ) | |||||||||
| Net change in net unrealized appreciation (depreciation) |
808,500 | 78,484 | 989,572 | (253,106 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in net assets resulting from operations |
963,431 | 260,215 | 1,043,732 | (74,404 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Distributions to Shareholders |
(218,581 | ) | (135,702 | ) | (223,206 | ) | (201,859 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Fund Shares Transactions |
||||||||||||||||
| Proceeds from shares sold |
— | 7,501,538 | 3,628,617 | 7,507,614 | ||||||||||||
| Value of shares redeemed |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in net assets resulting from fund share transactions |
— | 7,501,538 | 3,628,617 | 7,507,614 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total net increase (decrease) in Net Assets |
744,850 | 7,626,051 | 4,449,143 | 7,231,351 | ||||||||||||
| Net Assets |
||||||||||||||||
| Beginning of period |
7,626,076 | 25 | 7,231,376 | 25 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| End of period |
$ | 8,370,926 | $ | 7,626,076 | $ | 11,680,519 | $ | 7,231,376 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Changes in Shares Outstanding |
||||||||||||||||
| Shares outstanding, beginning of period |
300,001 | 1 | 300,001 | 1 | ||||||||||||
| Shares sold |
— | 300,000 | 150,000 | 300,000 | ||||||||||||
| Shares redeemed |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Shares outstanding, end of period |
300,001 | 300,001 | 450,001 | 300,001 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | Commencement of Operations. |
| See Notes to Financial Statements. | 55 |
DBX ETF Trust
Statements of Changes in Net Assets (Continued)
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
Xtrackers MSCI USA ESG Leaders Equity ETF |
|||||||||||||||
| Year Ended August 31, 2020 |
For the Period December 6, 2018(1) to August 31, 2019 |
Year Ended August 31, 2020 |
For the Period March 7, 2019(1) to August 31, 2019 |
|||||||||||||
| Increase (Decrease) in Net Assets from Operations |
||||||||||||||||
| Net investment income (loss) |
$ | 258,084 | $ | 150,899 | $ | 33,012,859 | $ | 9,603,428 | ||||||||
| Net realized gain (loss) |
(164,600 | ) | 6,372 | 4,492,657 | (233,999 | ) | ||||||||||
| Net change in net unrealized appreciation (depreciation) |
1,385,759 | (153,826 | ) | 386,265,567 | 70,086,607 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in net assets resulting from operations |
1,479,243 | 3,445 | 423,771,083 | 79,456,036 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Distributions to Shareholders |
(318,526 | ) | (79,679 | ) | (29,554,714 | ) | (5,225,013 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Fund Shares Transactions |
||||||||||||||||
| Proceeds from shares sold |
— | 7,485,954 | 1,074,035,689 | 1,307,476,148 | ||||||||||||
| Value of shares redeemed |
— | — | (142,918,766 | ) | (40,595,610 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in net assets resulting from fund share transactions |
— | 7,485,954 | 931,116,923 | 1,266,880,538 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total net increase (decrease) in Net Assets |
1,160,717 | 7,409,720 | 1,325,333,292 | 1,341,111,561 | ||||||||||||
| Net Assets |
||||||||||||||||
| Beginning of period |
7,409,745 | 25 | 1,341,111,586 | 25 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| End of period |
$ | 8,570,462 | $ | 7,409,745 | $ | 2,666,444,878 | $ | 1,341,111,586 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Changes in Shares Outstanding |
||||||||||||||||
| Shares outstanding, beginning of period |
300,001 | 1 | 50,250,001 | 1 | ||||||||||||
| Shares sold |
— | 300,000 | 38,450,000 | 51,850,000 | ||||||||||||
| Shares redeemed |
— | — | (4,950,000 | ) | (1,600,000 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Shares outstanding, end of period |
300,001 | 300,001 | 83,750,001 | 50,250,001 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | Commencement of Operations. |
| See Notes to Financial Statements. | 56 |
DBX ETF Trust
Statements of Changes in Net Assets (Continued)
| Xtrackers S&P 500 ESG ETF | ||||||||
| Year Ended August 31, 2020 |
For the Period June 26, 2019(1) to August 31, 2019 |
|||||||
| Increase (Decrease) in Net Assets from Operations |
||||||||
| Net investment income (loss) |
$ | 2,350,149 | $ | 87,334 | ||||
| Net realized gain (loss) |
745,744 | (70,217 | ) | |||||
| Net change in net unrealized appreciation (depreciation) |
37,102,920 | 88,464 | ||||||
|
|
|
|
|
|||||
| Net increase (decrease) in net assets resulting from operations |
40,198,813 | 105,581 | ||||||
|
|
|
|
|
|||||
| Distributions to Shareholders |
(1,693,157 | ) | — | |||||
|
|
|
|
|
|||||
| Fund Shares Transactions |
||||||||
| Proceeds from shares sold |
280,622,402 | 25,000,000 | ||||||
| Value of shares redeemed |
(60,077,355 | ) | (13,721,458 | ) | ||||
|
|
|
|
|
|||||
| Net increase (decrease) in net assets resulting from fund share transactions |
220,545,047 | 11,278,542 | ||||||
|
|
|
|
|
|||||
| Total net increase (decrease) in Net Assets |
259,050,703 | 11,384,123 | ||||||
| Net Assets |
||||||||
| Beginning of period |
11,384,148 | 25 | ||||||
|
|
|
|
|
|||||
| End of period |
$ | 270,434,851 | $ | 11,384,148 | ||||
|
|
|
|
|
|||||
| Changes in Shares Outstanding |
||||||||
| Shares outstanding, beginning of period |
450,001 | 1 | ||||||
| Shares sold |
10,700,000 | 1,000,000 | ||||||
| Shares redeemed |
(2,450,000 | ) | (550,000 | ) | ||||
|
|
|
|
|
|||||
| Shares outstanding, end of period |
8,700,001 | 450,001 | ||||||
|
|
|
|
|
|||||
| (1) | Commencement of Operations. |
| See Notes to Financial Statements. | 57 |
Financial Highlights
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF Selected Per Share Data |
Year Ended 8/31/2020 |
Period Ended 8/31/2019(a) |
||||||
| Net Asset Value, beginning of period |
$ | 25.42 | $ | 25.00 | ||||
|
|
|
|
|
|||||
| Income (loss) from investment operations: | ||||||||
| Net investment income (loss) (b) |
0.68 | 0.60 | ||||||
| Net realized and unrealized gain (loss) |
2.53 | 0.27 | ||||||
|
|
|
|
|
|||||
| Total from investment operations |
3.21 | 0.87 | ||||||
|
|
|
|
|
|||||
| Less distributions from: |
| |||||||
| Net investment income |
(0.73 | ) | (0.45 | ) | ||||
|
|
|
|
|
|||||
| Total distributions |
(0.73 | ) | (0.45 | ) | ||||
|
|
|
|
|
|||||
| Net Asset Value, end of period |
$ | 27.90 | $ | 25.42 | ||||
|
|
|
|
|
|||||
| Total Return (%) (c) |
12.74 | 3.44 | ** | |||||
| Ratios to Average Net Assets and Supplemental Data |
||||||||
| Net Assets, end of period ($ millions) |
8 | 8 | ||||||
| Ratio of expenses before fee waiver (%) |
0.16 | 0.16 | * | |||||
| Ratio of expenses after fee waiver (%) |
0.16 | 0.16 | * | |||||
| Ratio of net investment income (loss) (%) |
2.61 | 3.17 | * | |||||
| Portfolio turnover rate (%) (d) |
13 | 10 | ** | |||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF Selected Per Share Data |
Year Ended 8/31/2020 |
Period Ended 8/31/2019(e) |
||||||
| Net Asset Value, beginning of period |
$ | 24.10 | $ | 25.00 | ||||
|
|
|
|
|
|||||
| Income (loss) from investment operations: | ||||||||
| Net investment income (loss) (b) |
0.59 | 0.78 | ||||||
| Net realized and unrealized gain (loss) |
1.83 | (1.01 | ) | |||||
|
|
|
|
|
|||||
| Total from investment operations |
2.42 | (0.23 | ) | |||||
|
|
|
|
|
|||||
| Less distributions from: |
| |||||||
| Net investment income |
(0.56 | ) | (0.66 | ) | ||||
| Net realized gains |
— | (0.01 | ) | |||||
|
|
|
|
|
|||||
| Total distributions |
(0.56 | ) | (0.67 | ) | ||||
|
|
|
|
|
|||||
| Net Asset Value, end of period |
$ | 25.96 | $ | 24.10 | ||||
|
|
|
|
|
|||||
| Total Return (%) (c) |
10.12 | (0.91 | )** | |||||
| Ratios to Average Net Assets and Supplemental Data |
||||||||
| Net Assets, end of period ($ millions) |
12 | 7 | ||||||
| Ratio of expenses before fee waiver (%) |
0.14 | 0.14 | * | |||||
| Ratio of expenses after fee waiver (%) |
0.14 | 0.14 | * | |||||
| Ratio of net investment income (loss) (%) |
2.39 | 3.25 | * | |||||
| Portfolio turnover rate (%) (d) |
16 | 10 | ** | |||||
| (a) | For the period December 6, 2018 (commencement of operations) through August 31, 2019. |
| (b) | Based on average shares outstanding during the period. |
| (c) | Total Return would have been lower if certain expenses had not been reimbursed by the Advisor. |
| (d) | Portfolio turnover rate does not include securities received or delivered from processing creations or redemptions. |
| (e) | For the period September 6, 2018 (commencement of operations) through August 31, 2019. |
| * | Annualized. |
| ** | Not Annualized. |
| See Notes to Financial Statements. | 58 |
DBX ETF Trust
Financial Highlights (Continued)
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF Selected Per Share Data |
Year Ended 8/31/2020 |
Period Ended 8/31/2019(a) |
||||||
| Net Asset Value, beginning of period |
$ | 24.70 | $ | 25.00 | ||||
|
|
|
|
|
|||||
| Income (loss) from investment operations: | ||||||||
| Net investment income (loss) (b) |
0.86 | 0.50 | ||||||
| Net realized and unrealized gain (loss) |
4.07 | (0.53 | ) | |||||
|
|
|
|
|
|||||
| Total from investment operations |
4.93 | (0.03 | ) | |||||
|
|
|
|
|
|||||
| Less distributions from: |
| |||||||
| Net investment income |
(1.06 | ) | (0.27 | ) | ||||
| Net realized gains |
(0.00 | )(c) | — | |||||
|
|
|
|
|
|||||
| Total distributions |
(1.06 | ) | (0.27 | ) | ||||
|
|
|
|
|
|||||
| Net Asset Value, end of period |
$ | 28.57 | $ | 24.70 | ||||
|
|
|
|
|
|||||
| Total Return (%) (d) |
20.32 | (0.17 | )** | |||||
| Ratios to Average Net Assets and Supplemental Data |
||||||||
| Net Assets, end of period ($ millions) |
9 | 7 | ||||||
| Ratio of expenses before fee waiver (%) |
0.20 | 0.20 | * | |||||
| Ratio of expenses after fee waiver (%) |
0.20 | 0.20 | * | |||||
| Ratio of net investment income (loss) (%) |
3.38 | 2.68 | * | |||||
| Portfolio turnover rate (%) (e) |
17 | 16 | ** | |||||
| Xtrackers MSCI USA ESG Leaders Equity ETF Selected Per Share Data |
Year Ended 8/31/2020 |
Period Ended 8/31/2019(f) |
||||||
| Net Asset Value, beginning of period |
$ | 26.69 | $ | 25.00 | ||||
|
|
|
|
|
|||||
| Income (loss) from investment operations: | ||||||||
| Net investment income (loss) (b) |
0.51 | 0.24 | ||||||
| Net realized and unrealized gain (loss) |
5.10 | 1.57 | ||||||
|
|
|
|
|
|||||
| Total from investment operations |
5.61 | 1.81 | ||||||
|
|
|
|
|
|||||
| Less distributions from: |
| |||||||
| Net investment income |
(0.46 | ) | (0.12 | ) | ||||
|
|
|
|
|
|||||
| Total distributions |
(0.46 | ) | (0.12 | ) | ||||
|
|
|
|
|
|||||
| Net Asset Value, end of period |
$ | 31.84 | $ | 26.69 | ||||
|
|
|
|
|
|||||
| Total Return (%) (d) |
21.42 | 7.23 | ** | |||||
| Ratios to Average Net Assets and Supplemental Data |
||||||||
| Net Assets, end of period ($ millions) |
2,666 | 1,341 | ||||||
| Ratio of expenses before fee waiver (%) |
0.10 | 0.10 | * | |||||
| Ratio of expenses after fee waiver (%) |
0.09 | 0.10 | * | |||||
| Ratio of net investment income (loss) (%) |
1.83 | 1.89 | * | |||||
| Portfolio turnover rate (%) (e) |
9 | 5 | ** | |||||
| (a) | For the period December 6, 2018 (commencement of operations) through August 31, 2019. |
| (b) | Based on average shares outstanding during the period. |
| (c) | Amount represents less than $0.005. |
| (d) | Total Return would have been lower if certain expenses had not been reimbursed by the Advisor. |
| (e) | Portfolio turnover rate does not include securities received or delivered from processing creations or redemptions. |
| (f) | For the period March 7, 2019 (commencement of operations) through August 31, 2019. |
| * | Annualized. |
| ** | Not Annualized. |
| See Notes to Financial Statements. | 59 |
DBX ETF Trust
Financial Highlights (Continued)
| Xtrackers S&P 500 ESG ETF Selected Per Share Data |
Year Ended 8/31/2020 |
Period Ended 8/31/2019(a) |
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| Net Asset Value, beginning of period |
$ | 25.30 | $ | 25.00 | ||||
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| Income (loss) from investment operations: |
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| Net investment income (loss) (b) |
0.50 | 0.10 | ||||||
| Net realized and unrealized gain (loss) |
5.85 | 0.20 | ||||||
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| Total from investment operations |
6.35 | 0.30 | ||||||
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| Less distributions from: |
| |||||||
| Net investment income |
(0.57 | ) | — | |||||
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| Total distributions |
(0.57 | ) | — | |||||
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| Net Asset Value, end of period |
$ | 31.08 | $ | 25.30 | ||||
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| Total Return (%) (c) |
25.71 | 1.20 | ** | |||||
| Ratios to Average Net Assets and Supplemental Data |
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| Net Assets, end of period ($ millions) |
270 | 11 | ||||||
| Ratio of expenses before fee waiver (%) |
0.11 | 0.11 | * | |||||
| Ratio of expenses after fee waiver (%) |
0.11 | 0.11 | * | |||||
| Ratio of net investment income (loss) (%) |
1.86 | 2.08 | * | |||||
| Portfolio turnover rate (%) (d) |
11 | 0 | ** | |||||
| (a) | For the period June 26, 2019 (commencement of operations) through August 31, 2019. |
| (b) | Based on average shares outstanding during the period. |
| (c) | Total Return would have been lower if certain expenses had not been reimbursed by the Advisor. |
| (d) | Portfolio turnover rate does not include securities received or delivered from processing creations or redemptions. |
| * | Annualized. |
| ** | Not Annualized. |
| See Notes to Financial Statements. | 60 |
Notes to Financial Statements
1. Organization
DBX ETF Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end registered management investment company organized as a Delaware statutory trust.
As of August 31, 2020, the Trust consists of thirty-three investment series of exchange-traded funds (“ETFs”)
(each a “Fund” and collectively, the “Funds”) in operation and trading. These financial statements report on the Funds listed below:
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
| Xtrackers MSCI USA ESG Leaders Equity ETF |
| Xtrackers S&P 500 ESG ETF |
DBX Advisors LLC (“DBX” or the “Advisor”), an indirect, wholly-owned subsidiary of DWS Group GmbH & Co. KGaA (“DWS Group”), serves as investment advisor to the Funds and has overall responsibility for the general management and administration of the Funds, subject to the supervision of the Funds’ Board of Trustees (“Board”).
Each Fund offers shares that are listed and traded on the NYSE Arca, Inc. (“NYSE Arca”). Unlike conventional mutual funds, each Fund issues and redeems shares on a continuous basis, at net asset value (“NAV”), only in large specified lots consisting of 50,000 shares, each called a “Creation Unit”, to authorized participants who have entered into agreements with the Funds’ distributor. Shares are not individually redeemable securities of the Funds, and owners of the shares may acquire those shares from the Funds, or tender such shares for redemption to the Funds, in Creation Units only.
The investment objective of each Fund is to track the performance, before fees and expenses, of a particular index (the “Underlying Index”). The underlying indices for the Funds are:
| Fund |
Underlying Index | |
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF | MSCI ACWI ex USA ESG Leaders Index | |
| Xtrackers MSCI EAFE ESG Leaders Equity ETF | MSCI EAFE ESG Leaders Index | |
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF | MSCI Emerging Markets ESG Leaders Index | |
| Xtrackers MSCI USA ESG Leaders Equity ETF | MSCI USA ESG Leaders Index | |
| Xtrackers S&P 500 ESG ETF | S&P 500 ESG Index |
The MSCI ACWI ex USA ESG Leaders Index is a capitalization weighted index that provides exposure to companies with high Environmental, Social and Governance (“ESG”) performance relative to their sector peers. The Underlying Index is constructed using regional indexes that provide exposure to large- and medium- capitalization companies from developed and emerging markets countries (excluding the United States). The annual review of the Underlying Index takes place in May and it is rebalanced in August, November and February, and thus the Fund updates and rebalances its portfolio in a corresponding fashion.
The MSCI EAFE ESG Leaders Index is a capitalization weighted index that provides exposure to companies with high ESG performance relative to their sector peers. The Underlying Index consists of large- and medium-capitalization companies across developed markets countries, excluding Canada and the United States. The annual review of the Underlying Index takes place in May and it is rebalanced in August, November and February, and thus the Fund updates and rebalances its portfolio in a corresponding fashion.
The MSCI Emerging Markets ESG Leaders Index is a capitalization weighted index that provides exposure to companies with high ESG performance relative to their sector peers. The Underlying Index consists of large- and medium-capitalization companies across emerging markets countries. The annual review of the Underlying Index takes place in May and it is rebalanced in August, November and February, and thus the Fund updates and rebalances its portfolio in a corresponding fashion.
MSCI USA ESG Leaders Index is a capitalization weighted index that provides exposure to companies with high ESG performance relative to their sector peers. The Underlying Index consists of large- and medium-capitalization companies in the U.S market. The annual review of the Underlying Index takes place in May and it is rebalanced in August, November and February, and thus the Fund updates and rebalances its portfolio in a corresponding fashion.
61
DBX ETF Trust
Notes to Financial Statements (Continued)
S&P 500 ESG Index is a broad-based, market capitalization weighted index that provides exposure to companies with high ESG performance relative to their sector peers, while maintaining similar overall industry group weights as the S&P 500 Index. Under normal circumstances, the Underlying Index is rebalanced annually, effective after the close of the last business day of April. The Fund rebalances its portfolio in accordance with the Underlying Index, and therefore, any changes to the Underlying Index’s rebalance schedule will result in corresponding changes to the Fund’s rebalance schedule.
Each Fund is entitled to use its respective Underlying Index pursuant to a licensing agreement between the Index Provider and DBX. There is no charge to the Funds in connection with these licensing agreements.
Each Fund is non-diversified and is not limited by the Act with regard to the percentage of its assets that may be invested in the securities of a single issuer. This means the securities of a particular issuer (or securities of issuers in particular industries) may dominate the Underlying Index of the Fund and, consequently, the Fund’s investment portfolio. This may adversely affect the Fund’s performance or subject the Fund’s shares to greater price volatility than that experienced by more diversified investment companies. Each Fund may change its diversification status over time and then change it back again, without shareholder approval, solely as a result of a change in relative market capitalization or index weighting of one or more constituents of the index each Fund tracks.
Pursuant to the Trust’s organizational documents, the Trust’s officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business the Trust enters into contracts that contain a variety of representations that provide indemnification for certain liabilities. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Trust expects the risk of loss to be remote.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which require management to make certain estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. Each Fund qualifies as an investment company under Topic 946 of Accounting Standards Codification of U.S. GAAP. The following is a summary of significant accounting policies followed by the Funds.
Security Valuation The NAV of each Fund’s shares is calculated each business day as of the close of regular trading on the New York Stock Exchange, generally 4:00 p.m. Eastern Time. NAV per share is calculated by dividing a Fund’s net assets by the number of Fund shares outstanding.
Various inputs are used in determining the value of the Funds’ investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
Equity securities and ETFs are valued at the most recent sale price or official closing price reported on the exchange (U.S. or foreign) or over-the-counter market on which they trade. Securities or ETFs for which no sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation. Equity securities and ETFs are generally categorized as Level 1.
Corporate and sovereign debt securities are valued at prices supplied by independent pricing services approved by the Funds’ Board. Such services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. If the pricing services are unable to provide valuations, securities are valued at the mean between the bid and ask quotations or evaluated prices, as applicable, obtained from broker dealers. These securities are generally categorized as Level 2
Investments in open-end investment companies are valued at their NAV each business day and are categorized as Level 1.
62
DBX ETF Trust
Notes to Financial Statements (Continued)
Futures contracts are generally valued at the settlement prices established each day on the exchange on which they are traded and are categorized as Level 1.
Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Board and are generally categorized as Level 3. In accordance with the Funds’ valuation procedures, factors considered in determining value may include, but are not limited to, the type of the security; the size of the holding; the initial cost of the security; the existence of any contractual restrictions on the security’s disposition; the price and extent of public trading in similar securities of the issuer or of comparable companies; quotations or evaluated prices from broker-dealers and/or pricing services; information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities); an analysis of the company’s or issuer’s financial statements; an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold; and with respect to debt securities, the maturity, coupon, creditworthiness, currency denomination and the movement of the market in which the security is normally traded. The value determined under these procedures may differ from published values for the same securities.
Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s Underlying Index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s Underlying Index.
Disclosure about the classification of the fair value measurements is included in a table following the Fund’s Schedule of Investments.
Cash Cash consists of cash held at banks and is on deposit with major financial institutions.
Investment Transactions and Investment Income Investment transactions are recorded as of the date that the securities are purchased or sold (trade date). Realized gains and losses from the sale or disposition of securities are calculated on the identified cost-method. Dividend income is net of any foreign taxes withheld at source. Certain dividends from foreign securities may be recorded subsequent to the ex-dividend date as soon as the fund is informed of such dividends. Interest income is recorded on the accrual basis. Distributions received from foreign domiciled corporations, generally determined to be passive foreign investment companies for tax reporting purposes, are included in dividend income.
Tax Information and Dividends and Distributions to Shareholders It is each Fund’s policy to comply with all requirements of the Internal Revenue Code of 1986, as amended (“the Code”). Each Fund intends to qualify for and to elect treatment as a separate Regulated Investment Company (“RIC”) under Subchapter M of the Code. It is the policy of Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF, Xtrackers MSCI EAFE ESG Leaders Equity ETF and Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF to pay out dividends from its net investment income, if any, to investors semi-annually. It is the policy of Xtrackers MSCI USA ESG Leaders Equity ETF and Xtrackers S&P 500 ESG ETF to pay out dividends from its net investment income, if any, to investors quarterly. Taxable net realized gains from investment transactions, reduced by capital loss carryforwards, if any, are declared and distributed to shareholders at least annually. The capital loss carryforward amount, if any, is available to offset future net capital gains. The Funds may occasionally be required to make supplemental distributions at some other time during the year. The Funds reserve the right to declare special distributions if, in their reasonable discretion, such action is necessary or advisable to preserve the status of each Fund as a RIC or to avoid imposition of income or excise taxes on undistributed income. Dividends and distributions to shareholders, if any, are recorded on the ex-dividend date. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with Federal income tax regulations which may differ from U.S. GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified at the end of the year within the components of net assets based on their federal tax treatment; temporary differences do not require reclassification. Dividends and distributions, which exceed earnings and profits for the full year for tax purposes, are reported as a tax return of capital.
In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Funds’ tax positions taken or expected to be taken on foreign, federal and state income tax returns for all open tax years and has concluded that no provision for income tax is required in the Funds’ financial statements.
63
DBX ETF Trust
Notes to Financial Statements (Continued)
The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense on the Statements of Operations. For the year ended August 31, 2020, the Funds did not incur any interest or penalties.
As of August 31, 2020, the components of accumulated earnings (losses) on a tax basis were as follows:
| Undistributed Ordinary Income* |
Capital and Other Gains (Losses) |
Unrealized Appreciation (Depreciation) |
Total Accumulated Earnings (Losses) |
|||||||||||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
$ | 43,268 | $ | (41,721 | ) | $ | 867,816 | $ | 869,363 | |||||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
54,743 | (206,763 | ) | 696,283 | 544,263 | |||||||||||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
27,474 | (143,062 | ) | 1,200,071 | 1,084,483 | |||||||||||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
7,836,560 | (16,829,206 | ) | 447,499,989 | 438,507,343 | |||||||||||
| Xtrackers S&P 500 ESG ETF |
744,326 | (532,195 | ) | 36,388,830 | 36,600,961 | |||||||||||
The tax character of dividends and distributions declared for the year ended August 31, 2020 and period ended August 31, 2019 were as follows:
| Year Ended August 31, 2020 | ||||||||
| Ordinary Income* | Long Term Capital Gain |
|||||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
$ | 218,581 | $ | — | ||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
223,206 | — | ||||||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
317,935 | 591 | ||||||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
29,554,714 | — | ||||||
| Xtrackers S&P 500 ESG ETF |
1,693,157 | — | ||||||
| Period Ended August 31, 2019 | ||||
| Ordinary Income* | ||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
$ | 135,702 | ||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
201,859 | |||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
79,679 | |||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
5,225,013 | |||
| * | For tax purposes short-term capital gain distributions are considered ordinary income distributions. |
At August 31, 2020, for Federal income tax purposes, the Funds have capital loss carryforwards available as shown in the table below, to the extent provided by regulations, to offset future capital gains for an unlimited period. To the extent that these loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to shareholders.
| Short-Term | Long-Term | Total Amount | ||||||||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
$ | 188 | $ | 41,533 | $ | 41,721 | ||||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
74,886 | 131,877 | 206,763 | |||||||||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
47,690 | 95,372 | 143,062 | |||||||||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
5,844,483 | 10,984,723 | 16,829,206 | |||||||||
| Xtrackers S&P 500 ESG ETF |
532,195 | — | 532,195 | |||||||||
For the period ended August 31, 2020, the effect of permanent “book/tax” reclassifications to the components of net assets are included below. These differences are primarily due to redemptions-in-kind.
| Distributable earnings (loss) |
Paid-In Capital |
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| Xtrackers MSCI USA ESG Leaders Equity ETF |
$ | (28,136,009 | ) | $ | 28,136,009 | |||
| Xtrackers S&P 500 ESG ETF |
(2,080,249 | ) | 2,080,249 | |||||
64
DBX ETF Trust
Notes to Financial Statements (Continued)
As of August 31, 2020, the aggregate cost of investments for federal income tax purposes, the net unrealized appreciation or (depreciation) and the aggregated gross unrealized appreciation (depreciation) on investments were as follows:
| Aggregate Tax Cost |
Net Unrealized Appreciation (Depreciation) |
Aggregate Gross Unrealized Appreciation |
Aggregate Gross Unrealized (Depreciation) |
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| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
$ | 7,469,204 | 868,644 | $ | 1,635,517 | $ | (766,873 | ) | ||||||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
11,002,201 | 694,430 | 1,580,624 | (886,194 | ) | |||||||||||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
7,374,787 | 1,204,629 | 2,158,719 | (954,090 | ) | |||||||||||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
2,214,595,050 | 447,499,989 | 527,611,813 | (80,111,824 | ) | |||||||||||
| Xtrackers S&P 500 ESG ETF |
233,759,584 | 36,388,830 | 42,983,368 | (6,594,538 | ) | |||||||||||
Foreign Taxes The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, capital gains on investments, certain foreign currency transactions or other corporate events. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on capital gains from sales of investments and foreign currency transactions are included in their respective net realized gain (loss) categories, and deferred foreign taxes on unrealized gains are included in net change in unrealized appreciation (depreciation). Receivables and payables related to foreign taxes as of August 31, 2020, if any, are disclosed in the Funds’ Statements of Assets and Liabilities.
Foreign Currency Translations The books and records of the Funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing exchange rates at period end. Purchases and sales of investment securities, income and expenses are translated into U.S. dollars at the prevailing exchange rates on the respective dates of the transactions.
Net realized and unrealized gains and losses on foreign currency transactions represent net gains and losses between trade and settlement dates on securities transactions, the acquisition and disposition of foreign currencies, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. The portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed, but is included with net realized and unrealized gain/appreciation and loss/depreciation on investments.
Securities Lending The Funds may lend securities to certain financial institutions under the terms of their securities lending agreement. During the term of the loans, the Funds continue to receive interest and dividends generated by the securities and to participate in any changes in their market value. The Funds require the borrowers of the securities to maintain collateral with the Funds consisting of cash and/or securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities having a value at least equal to the value of the securities loaned. When the collateral falls below specified amounts, the lending agent will use its best effort to obtain additional collateral on the next business day to meet required amounts under the securities lending agreement. During the year ended August 31, 2020, the Funds invested the cash collateral into a joint trading account in DWS Government & Agency Securities Portfolio, an affiliated money market fund managed by DWS Investment Management Americas, Inc. DWS Investment Management Americas, Inc. receives a management/administration fee (0.06% annualized effective rate as of August 31, 2020) on the cash collateral invested in DWS Government & Agency Securities Portfolio. The Funds receive compensation for lending their securities either in the form of fees or by earning interest on invested cash collateral, net of borrower rebates and fees paid to a lending agent. Either the Fund or the borrower may terminate the loan at any time and the borrower, after notice, is required to return borrowed securities within a standard time period. There may be risks of delay and costs in recovery of securities or even loss of rights in the collateral should the borrower of the securities fail financially. If the Funds are not able to recover securities lent, the Funds may sell the collateral and purchase a replacement investment in the market, incurring the risk that the value of the replacement security is greater than the value of the collateral. The Funds are also subject to all investment risks associated with the reinvestment of any cash
65
DBX ETF Trust
Notes to Financial Statements (Continued)
collateral received, including, but not limited to, interest rate, credit and liquidity risk associated with such investments.
As of August 31, 2020, the Funds listed below had securities on loan. The value of the related collateral exceeded the value of the securities loaned at year end.
| Remaining Contractual Maturity of the Agreements, as of August 31, 2020 |
||||||||||||||||||||
| Securities Lending Transactions | Overnight and Continuous |
<30 Days | Between 30 & 90 days |
>90 days | Total | |||||||||||||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
| |||||||||||||||||||
| Common Stocks |
$ | 18,551 | $ | 11 | $ | 34 | $ | 23,401 | $ | 41,997 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions |
|
$ | 41,997 | |||||||||||||||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
| |||||||||||||||||||
| Common Stocks |
$ | 55,300 | $ | — | $ | — | $ | 39,060 | $ | 94,360 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions |
|
$ | 94,360 | |||||||||||||||||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
| |||||||||||||||||||
| Common Stocks |
$ | 18,150 | $ | 31 | $ | 95 | $ | 27,128 | $ | 45,404 | ||||||||||
| Exchange- Trade Funds |
11,325 | — | — | — | 11,325 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Borrowings |
$ | 29,475 | $ | 31 | $ | 95 | $ | 27,128 | $ | 56,729 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions |
|
$ | 45,404 | |||||||||||||||||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
| |||||||||||||||||||
| Common Stocks |
$ | 95,593 | $ | 139,054 | $ | 504,691 | $ | 19,868,410 | $ | 20,607,748 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions |
|
$ | 20,607,748 | |||||||||||||||||
| Xtrackers S&P 500 ESG ETF |
| |||||||||||||||||||
| Common Stocks |
$ | 84,196 | $ | 5,161 | $ | 82,088 | $ | 3,646,493 | $ | 3,817,938 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions |
|
$ | 3,817,938 | |||||||||||||||||
Derivatives
Futures Contracts Each Fund may enter into futures contracts. These futures contracts will be used to simulate investment in the respective Underlying Index, to facilitate trading or to reduce transaction costs. Each Fund will enter into futures contracts that are traded on a U.S. or non-U.S. exchange. No Fund will use futures for speculative purposes. Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a specific instrument or index at a specified future time and at a specified price. For the year ended August 31, 2020, Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF, Xtrackers MSCI EAFE ESG Leaders Equity ETF, Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF, Xtrackers MSCI USA ESG Leaders Equity ETF and Xtrackers S&P 500 ESG ETF utilized futures in order to simulate investment in the Funds’ Underlying Index. To the extent required by law, liquid assets committed to futures contracts will be maintained.
At the time each Fund enters into a futures contract, each Fund deposits and maintains as collateral an initial margin with the broker, as required by the exchange on which the transaction is affected. Pursuant to the contract, each Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as variation margin and are recorded by each Fund as unrealized gains or losses. Risks may arise from the potential inability of a counterparty to meet the terms of the contract. The credit/counterparty risk for exchange-traded futures contracts is generally less than privately negotiated futures contracts, since the clearinghouse, which is the issuer or counterparty to each exchange-traded future, provides a guarantee of performance. The guarantee is supported by a daily payment system (i.e., margin requirements).
Use of long futures contracts subjects each Fund to risk of loss in excess of the amounts shown on the Statement of Assets and Liabilities, up to the notional value of the futures contracts. Use of short futures contracts subjects each Fund to unlimited risk of loss. Under some circumstances, futures exchanges may establish daily limits on
66
DBX ETF Trust
Notes to Financial Statements (Continued)
the amount that the price of a futures contract can vary from the previous day’s settlement price, which could effectively prevent liquidation of unfavorable positions.
A summary of the open futures contracts as of August 31, 2020 is included in a table following the Funds’ Schedule of Investments.
The following tables summarize the value of the Funds’ derivative instruments held as of August 31, 2020 and the related location in the accompanying Statement of Assets and Liabilities, presented by primary underlying risk exposure:
| Asset Derivatives |
Liability Derivatives |
|||||||||||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
| |||||||||||||
| Equity contracts | Unrealized appreciation on futures contracts* | $ | 5,655 | Unrealized depreciation on futures contracts* | $ | — | ||||||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
| |||||||||||||
| Equity contracts | Unrealized appreciation on futures contracts* | $ | — | Unrealized depreciation on futures contracts* | $ | 88 | ||||||||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
| |||||||||||||
| Equity contracts | Unrealized appreciation on futures contracts* | $ | 5,655 | Unrealized depreciation on futures contracts* | $ | — | ||||||||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
| |||||||||||||
| Equity contracts | Unrealized appreciation on futures contracts* | $ | 312,300 | Unrealized depreciation on futures contracts* | $ | 2,220 | ||||||||
| Xtrackers S&p 500 ESG ETF |
| |||||||||||||
| Equity contracts | Unrealized appreciation on futures contracts* | $ | 50,260 | Unrealized depreciation on futures contracts* | $ | — | ||||||||
| * | Includes cumulative appreciation or cumulative depreciation of futures contracts as disclosed in the Schedule of Investments. Unsettled variation margin is disclosed separately within the Statement of Assets and Liabilities. |
Additionally, the amount of realized and unrealized gains and losses on derivative instruments recognized in the Funds’ earnings during the year ended August 31, 2020 and the related location in the accompanying Statement of Operations is summarized in the following tables by primary underlying risk exposure:
| Net Realized Gain (Loss) from: |
||||
| Futures Contracts — Equity Contracts |
||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
$ | (1,845 | ) | |
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
5,578 | |||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
10,322 | |||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
(1,192,367 | ) | ||
| Xtrackers S&P 500 ESG ETF |
(35,753 | ) | ||
| Net Change in Unrealized Appreciation (Depreciation) on: |
||||
| Futures Contracts — Equity Contracts |
||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
$ | 8,050 | ||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
(22 | ) | ||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
6,820 | |||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
294,392 | |||
| Xtrackers S&P 500 ESG ETF |
50,260 | |||
67
DBX ETF Trust
Notes to Financial Statements (Continued)
For the year ended August 31, 2020 the average monthly volume of derivatives was as follows:
| Futures Contracts (Contract Value) |
||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
$ | 50,313 | ||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
32,174 | |||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
47,078 | |||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
3,934,747 | |||
| Xtrackers S&P 500 ESG ETF |
319,346 | |||
Affiliated Cash Management Vehicles The Funds may invest uninvested cash balances in DWS Government Money Market Series and DWS ESG Liquidity Fund, affiliated money market funds which are managed by DWS Investment Management Americas, Inc. (“DIMA”), also an indirect, wholly owned subsidiary of DWS Group GmbH & Co. KGaA. Each affiliated money market fund is managed in accordance with Rule 2a-7 under the 1940 Act, which governs the quality, maturity, diversity and liquidity of instruments in which a money market fund may invest. DWS Government Money Market Series seeks to maintain a stable NAV, and DWS ESG Liquidity Fund maintains a floating NAV. The Funds indirectly bear their proportionate share of the expenses of each affiliated money market fund in which they invest. The Advisor will waive an amount of the unitary advisory fee payable to the Advisor by the Funds equal to such acquired fund’s fees and expenses on the Funds’ assets invested in the affiliated money market funds.
3. Investment Advisory and Other Agreements
The Advisor has overall responsibility for the general management and administration of the Funds, subject to the supervision of the Funds’ Board of Trustees. Under an investment advisory agreement between the Trust, on behalf of the Funds, and the Advisor (the “Investment Advisory Agreement”), the Advisor is responsible for arranging sub-advisory, transfer agency, custody, fund administration, and all other non-distribution related services for the Funds to operate.
For its investment advisory services to the Funds below, the Advisor was entitled to receive a unitary advisory fee based on each Fund’s average daily net assets, computed and accrued daily and payable monthly, at an annual rate equal to:
| Unitary Advisory Fee |
||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
0.16 | % | ||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
0.14 | % | ||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
0.20 | % | ||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
0.10 | % | ||
| Xtrackers S&P 500 ESG ETF |
0.11 | % | ||
Effective July 31, 2019, the Advisor for the Xtrackers MSCI USA ESG Leaders Equity ETF has voluntarily elected to waive its fees and/or reimburse Fund expenses to the extent necessary to maintain the Fund’s total annual operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage, interest expense and acquired fund fees and expenses) at 0.09% of the Fund’s average daily net assets. Any voluntary waiver or reimbursement implemented by the Advisor may be eliminated by the Advisor at any time. For the year ended August 31, 2020, the Advisor waived $180,646 of expenses to the Fund.
Effective July 28, 2020, the Advisor for the Xtrackers S&P 500 ESG ETF has contractually agreed through July 28, 2021 to waive its fees and/or reimburse fund expenses to the extent necessary to prevent the operating expenses of the fund (excluding interest expense, taxes, brokerage expenses, distribution fees or expenses, litigation expenses and other extraordinary expenses) from exceeding 0.10% of the fund’s average daily net assets. This agreement may only be terminated by the fund’s Board (and may not be terminated by the Advisor) prior to that time. For the year ended August 31, 2020, the Advisor waived $2,385 of expenses to the Fund.
68
DBX ETF Trust
Notes to Financial Statements (Continued)
The Advisor for the Funds below has contractually agreed to waive a portion of its unitary advisory fees in an amount equal to the acquired fund’s fees and expenses attributable to the Funds’ investments in affiliated Funds. For the year ended August 31, 2020, the Advisor waived expenses of the Funds as follows:
| Expenses Waived |
||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
$ | 49 | ||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
4 | |||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
24 | |||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
2,393 | |||
| Xtrackers S&P 500 ESG ETF |
208 | |||
Out of the unitary advisory fee, the Advisor pays substantially all expenses of each Fund, including the cost of transfer agency, custody, fund administration, legal, audit and other services, and expenses of the Independent Trustees. Each Fund is responsible for the payment of interest expense, acquired fund fees and expenses, taxes, brokerage expenses, distribution fees or expenses, if any, litigation expenses and extraordinary expenses.
The Bank of New York Mellon, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as Administrator, Custodian, Accounting Agent, Lending Agent and Transfer Agent for each Fund.
ALPS Distributors, Inc. (the “Distributor”) serves as the distributor of Creation Units for each Fund on an agency basis. The Distributor does not maintain a secondary market in shares of the Funds.
The Board of Trustees is currently comprised of three Independent Trustees. The Advisor paid retainer fees and attendance fees to each Independent Trustee; retainer fees to the Chairman of the Board of Trustees and Chairman of the Audit Committee; and attendance fees to each member of the Audit Committee (which is comprised of all of the Funds’ Independent Trustees).
4. Investment Portfolio Transactions
For the year ended August 31, 2020, the cost of investments purchased and proceeds from sale of investments (excluding in-kind transactions and short-term investments) were as follows:
| Purchases | Sales | |||||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
$ | 1,033,022 | $ | 1,052,752 | ||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
1,549,689 | 1,503,824 | ||||||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
1,297,979 | 1,348,664 | ||||||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
158,253,786 | 156,204,931 | ||||||
| Xtrackers S&P 500 ESG ETF |
14,577,476 | 14,541,919 | ||||||
For the year ended August 31, 2020, the cost of in-kind purchases and proceeds from in-kind sales were as follows:
| Purchases | Sales | |||||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
$ | 3,587,041 | $ | — | ||||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
1,073,654,046 | 142,906,957 | ||||||
| Xtrackers S&P 500 ESG ETF |
280,601,553 | 60,074,300 | ||||||
5. Fund Share Transactions
As of August 31, 2020, there were unlimited Fund shares, no par value, authorized by the Trust. Fund shares are issued and redeemed by each Fund only in Creation Units or multiples thereof. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets. The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind contribution of a designated portfolio of securities constituting a portfolio sampling representation of the securities included in the respective Fund’s Underlying Index and an amount of cash, which under certain circumstances may include cash in lieu of portfolio securities. Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.
69
DBX ETF Trust
Notes to Financial Statements (Continued)
6. Concentration of Ownership
From time to time, the Funds may have a concentration of several shareholder accounts holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Fund. At August 31, 2020, there was one affiliated shareholder account for each of the funds listed below holding a significant percentage of the shares outstanding:
| Approximate Percent of Outstanding Shares Held |
||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
53 | % | ||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
21 | % | ||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
30 | % | ||
7. Investing in Emerging Markets
The securities of issuers located in emerging markets tend to be more volatile and less liquid than securities of issuers located in more mature economies, and emerging markets generally have less diverse and less mature economic structures and less stable political systems than those of developed countries. The securities of issuers located or doing substantial business in emerging markets are often subject to rapid and large changes in price.
8. Line of Credit
The Trust has entered into a senior unsecured credit facility with a syndication of banks which allows the Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF, Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF and certain other funds managed by the Advisor to borrow up to $105 million. Each Fund may borrow money under this credit facility to the extent necessary for temporary or emergency purposes, including the funding of shareholder redemption requests, trade settlements, and as necessary to distribute to shareholders any income necessary to maintain each Funds’ status as a regulated investment company. Borrowings are charged an interest rate of 1.25% per annum plus the greater of the Federal Funds Effective Rate or the one-month LIBOR Rate. Each Fund may borrow up to the lesser of 33 percent of its net assets as permitted by the Act or 25 percent of adjusted total net assets. The Funds had no outstanding loans at August 31, 2020.
9. Other — COVID-19 Pandemic
A novel strain of coronavirus (COVID-19) outbreak was declared a pandemic by the World Health Organization on March 11, 2020. The situation is evolving with various cities and countries around the world responding in different ways to address the pandemic. There are direct and indirect economic effects developing for various industries and individual companies throughout the world. The recent pandemic spread of the novel coronavirus and related geopolitical events could lead to increased financial market volatility, disruption to U.S. and world economies and markets and may have significant adverse effects on a Fund and its investments. A prolonged disruption may result in a Fund and its service providers experiencing operational difficulties in implementing their business continuity plans. Management will continue to monitor the impact COVID-19 has on the Funds and reflect the consequences as appropriate in each Fund’s accounting and financial reporting.
70
Report of Independent Registered Public Accounting Firm
To the Shareholders of Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF, Xtrackers MSCI EAFE ESG Leaders Equity ETF, Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF, Xtrackers MSCI USA ESG Leaders Equity ETF, Xtrackers S&P 500 ESG ETF, and the Board of Trustees of DBX ETF Trust:
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF, Xtrackers MSCI EAFE ESG Leaders Equity ETF, Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF, Xtrackers MSCI USA ESG Leaders Equity ETF, and Xtrackers S&P 500 ESG ETF (collectively referred to as the “Funds”), (five of the funds constituting DBX ETF Trust (the “Trust”)), including the schedules of investments, as of August 31, 2020, and the related statements of operations and changes in net assets, and the financial highlights for each of the periods indicated in the table below and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds (five of the funds constituting DBX ETF Trust) at August 31, 2020, and the results of their operations, changes in net assets and financial highlights for each of the periods indicated in the table below, in conformity with U.S. generally accepted accounting principles.
| Individual fund constituting the DBX ETF Trust |
Statement of operations | Statements of changes in net assets |
Financial highlights | |||
| Xtrackers MSCI ACWI
Xtrackers MSCI |
For the year ended August 31, 2020 |
For the year ended August 31, 2020 and the period from December 6, 2018 (commencement of operations) through August 31, 2019 | ||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
For the year ended August 31, 2020 |
For the year ended August 31, 2020 and the period from September 6, 2018 (commencement of operations) through August 31, 2019 | ||||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
For the year ended August 31, 2020 |
For the year ended August 31, 2020 and the period from March 7, 2019 (commencement of operations) through August 31, 2019 | ||||
| Xtrackers S&P 500 ESG ETF |
For the year ended August 31, 2020 |
For the year ended August 31, 2020 and the period from June 26, 2019 (commencement of operations) through August 31, 2019 | ||||
Basis for Opinion
These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on each of the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 2020, by correspondence
71
DBX ETF Trust
Report of Independent Registered Public Accounting Firm (Continued)
with the custodians and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more investment companies in the DWS family of funds since at least 1979, but we are unable to determine the specific year.
New York, New York
October 26, 2020
72
Board Members and Officers (Unaudited)
Identification and Background
The Board has responsibility for the overall management and operations of the funds, including general supervision of the duties performed by the Advisor and other service providers. Each Board Member serves until his or her successor is duly elected or appointed and qualified. Each officer serves until he or she resigns, is removed, dies, retires or becomes disqualified.
The Trust currently has three Board Members. The three Independent Board Members have no affiliation or business connection with the Advisor or any of its affiliated persons and do not own any stock or other securities issued by the Advisor.
The Independent Board Members of the Trust, their term of office and length of time served, their principal business occupations during the past five years, the number of portfolios in the fund complex (defined below) overseen by each Independent Board Member, and other directorships, if any, held by the Board Members are shown below. The fund complex includes all registered open- and closed-end funds (including all of their portfolios) advised by the Advisor and any registered funds that have an investment advisor that is an affiliated person of the Advisor. As of the date of this shareholder report, the fund complex consists of the funds in the Trust, as well as the registered funds advised by affiliates of the Advisor.
Shareholder Communications to the Board. Shareholders may send communications to the Trust’s Board by addressing the communications directly to the Board (or individual Board Members) and/or otherwise clearly indicating in the salutation that the communication is for the Board (or individual Board Members). The shareholder may send the communication to either the Trust’s office or directly to such Board members c/o 875 Third Avenue, New York, NY 10022. Other shareholder communications received by the Trust not directly addressed and sent to the Board will be reviewed and generally responded to by management. Such communications will be forwarded to the Board at management’s discretion based on the matters contained therein.
| Independent Board Members |
||||||
| Name, Year of Birth, Position with the Trust and Length of Time Served(1) |
Business Experience and Directorships During the Past 5 Years |
Number of Portfolios in Fund Complex Overseen |
Other Directorships Held by Board Member | |||
| Stephen R. Byers (1953) Chairman since 2016, and Board Member since 2011 (formerly, Lead Independent Board Member, 2015-2016) |
Independent Director (2011- present); Independent Consultant (2014-present); Director of Investment Management, the Dreyfus Corporation (2000-2006) and Vice Chairman and Chief Investment Officer, the Dreyfus Corporation (2002-2006). | 33 | The Arbitrage Funds, Sierra Income Corporation, Mutual Fund Directors Forum | |||
| George O. Elston (1964) Board Member since 2011, Chairman of the Audit Committee since 2015 |
Chief Financial Officer, Enzyvant (2018-present); Chief Executive Officer, 2X Oncology, Inc. (2017-2018); Senior Vice President and Chief Financial Officer, Juniper Pharmaceuticals, Inc. (2014-2016); Senior Vice President and Chief Financial Officer, KBI BioPharma Inc. (2013-2014); Managing Partner, Chatham Street Partners (2010-2013). | 33 | — | |||
| J. David Officer (1948) Board Member since 2011, Chairman of the Nominating Committee since 2015 |
Independent Director (2010-present); Vice Chairman, the Dreyfus Corporation (2006-2009); President, The Dreyfus Family of Funds, Inc. (2006-2009). | 33 | (Chairman of) Ilex Management Ltd; Old Westbury Funds |
73
DBX ETF Trust
Board Members and Officers (Unaudited) (Continued)
| Officers(2) |
||
| Name, Year of Birth, Position with the Trust and Length of Time Served(4) |
Business Experience and Directorships During the Past 5 Years | |
| Freddi Klassen(5) (1975) President and Chief Executive Officer, 2016-present |
Director(3) in DWS and Chief Operating Officer in the Americas for the Traditional Asset Classes Department (2014-present); Manager and Chief Operating Officer of DWS Investment Management Americas, Inc. (2018-present) and the Advisor (2016-present); Global Chief Operating Officer for Equities Technology in the Investment Bank Division at Deutsche Bank AG (2013-2014); Chief Operating Officer for Exchange Traded Funds and Systematic Funds in Europe (2008-2013). | |
| Luke Oliver(5) (1980) Chief Operating Officer, 2019-present |
Managing Director(3) in DWS (2017-present); Director(3) in DWS (2009-2017); Head of Passive Americas Asset Management Platform (2019-present); Manager, Chief Executive Officer and Chief Investment Officer of the Advisor (2019-present); Head of ETF Capital Markets, Americas (2012-2018); Lead Portfolio Manager of PowerShares DB ETFs (2009-2012). | |
| Diane Kenneally(6) (1966) Treasurer, Chief Financial Officer and Controller, 2019-present |
Director(3) in DWS; Chief Financial Officer and Treasurer for DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (2018-present); Treasurer and Chief Financial Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2018-present); formerly: Assistant Treasurer for the DWS funds (2007-2018). | |
| Frank Gecsedi(5) (1967) Chief Compliance Officer, 2010-present |
Director(3) in DWS Compliance Department (2016-present), Vice President in the Deutsche Asset Management Compliance Department at Deutsche Bank AG (2013-2016) and Chief Compliance Officer of the Advisor (2010-present); Chief Compliance Officer of DWS Distributors, Inc. (2019-present); Vice President in Deutsche Bank’s Global Markets Legal, Risk and Capital Division (2010-2012). | |
| Bryan Richards(5) (1978) Vice President, 2016-present |
Managing Director(3) in DWS (2018-present); Director(3) in DWS (2014-2018); Portfolio Manager in the Passive Asset Management Department at DWS (2011-present); Primary Portfolio Manager for the PowerShares DB Commodity ETFs (2011-2015). | |
| John Millette(6) (1962) Secretary, 2020-present |
Director(3) in DWS US Retail Legal (2003-present); Vice President and Secretary of DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (1999-present); Chief Legal Officer, DWS Investment Management Americas, Inc. (2015-present); Director and Vice President of DWS Trust Company (2016-present); Secretary, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2011-present); formerly: Secretary of Deutsche Investment Management Americas Inc. (2015-2017); Assistant Secretary of DBX ETF Trust (2019-2020); Assistant Secretary (July 14, 2006-December 31, 2010) and Secretary (January 31, 2006-July 13, 2006), The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. |
74
DBX ETF Trust
Board Members and Officers (Unaudited) (Continued)
| Name, Year of Birth, Position with the Trust and Length of Time Served(4) |
Business Experience and Directorships During the Past 5 Years | |
| Caroline Pearson(6) (1962) Assistant Secretary, 2020-present |
Managing Director(3) in DWS US Retail Legal; Chief Legal Officer of DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (2010-present); Chief Legal Officer, DBX Advisors LLC and DBX Strategic Advisors LLC (2020-present); Chief Legal Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2012-present); formerly: Secretary, Deutsche AM Distributors, Inc. (2002-2017); and Secretary, Deutsche AM Service Company (2010-2017). | |
| Paul Antosca(6) (1957) Assistant Treasurer, 2019-present |
Director(3) in DWS; Assistant Treasurer for DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (2007-present). | |
| Jeffrey Berry(6) (1959) Assistant Treasurer, 2019-present |
Director(3) in DWS. | |
| Sheila Cadogan(6) (1966) Assistant Treasurer, 2019-present |
Director(3) in DWS; Assistant Treasurer for DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (2017-present); Director and Vice President, DWS Trust Company (2018-present); Assistant Treasurer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2018-present). | |
| Christina A. Morse(7) (1964) Assistant Secretary, 2017-present |
Vice President at BNY Mellon-Asset Servicing (2014-present); Vice President and Counsel at Lord Abbett & Co. LLC (2013-2014). | |
| Michelle Goveia-Pine(5) (1970) Interim Anti-Money Laundering Compliance Officer, since July 9, 2020 |
Director(3) in DWS; Interim AML Officer, DWS Trust Company (since July 28, 2020); and Interim AML Officer of DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (since July 10, 2020); Interim AML Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (since July 24, 2020). |
| (1) | The length of time served is represented by the year in which the Board Member joined the Board. |
| (2) | As a result of their respective positions held with the Advisor and its affiliates, these individuals are considered “interested persons” of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the Funds. |
| (3) | Executive title, not a board directorship. |
| (4) | The length of time served is represented by the year in which the officer was first elected to the Trust in such capacity. |
| (5) | Address: 875 Third Avenue, New York, New York 10022. |
| (6) | Address: 100 Summer Street, Boston, MA 02110. |
| (7) | Address: BNY Mellon Asset Servicing, 240 Greenwich Street, New York, NY 10286. |
The Funds’ Statement of Additional Information (“SAI”) includes additional information about the Funds’ Board Members. The SAI is available by calling 855-329-3837, or on the Company’s website at www.Xtrackers.com.
75
Additional Information (Unaudited)
Proxy Voting Policies and Procedures
The Funds’ policies and procedures for voting proxies for portfolio securities and information about how each Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 are available on our Web site — www.Xtrackers.com (click on “Resources” and “Proxy Voting” at the top of the page) — or on the SEC’s Web site — www.sec.gov. To obtain a written copy of the Funds’ policies and procedures without charge, upon request, call us toll free at (855) 329-3837.
Portfolio Holdings Information
The Funds are required to file their complete schedule of portfolio holdings with the SEC for their first and third fiscal quarters on Form N-PORT. Copies of the filings are available without charge, upon request on the SEC’s website at www.sec.gov and are available by calling the Trust at 855-329-3837.
Information about each Fund’s portfolio holdings is available daily at www.Xtrackers.com.
Discount & Premium Information
Information regarding how often shares of each Fund traded on NYSE Arca at a price above (i.e.,at a premium) or below (i.e., at a discount) the NAV of the Fund can be found at www.Xtrackers.com.
Tax Information
Form 1099-DIV and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.
Each Fund designates the following amounts or, if subsequently determined to be different, the maximum allowable for its period ended August 31, 2020.
| Qualified Dividend Income* |
Dividends Received Deduction* |
|||||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
85% | 0% | ||||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
90% | 0% | ||||||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
73% | 0% | ||||||
| Xtrackers MSCI USA ESG Leaders Equity ETF |
100% | 90% | ||||||
| Xtrackers S&P 500 ESG ETF |
95% | 91% | ||||||
* The above percentage is based on ordinary income dividends paid to shareholders during each Fund’s fiscal year.
Each Fund intends to elect to pass through to shareholders the credit for taxes paid to foreign countries. The gross foreign source income and foreign taxes paid are as follows:
| Gross Foreign Income | Foreign Taxes Income | |||||||
| Xtrackers MSCI ACWI ex USA ESG Leaders Equity ETF |
$239,979 | $22,683 | ||||||
| Xtrackers MSCI EAFE ESG Leaders Equity ETF |
270,461 | 23,793 | ||||||
| Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF |
294,243 | 20,702 | ||||||
76
Privacy Policy Notice (Unaudited)
DBX Advisors LLC (“Advisors”) collects non-public information about you from the following sources: (i) information received from you on applications or other forms; and (ii) information about your transactions with the Advisors, Advisors’ affiliates and third-party service providers and vendors. Advisors does not disclose any non-public personal information about you to anyone, other than as set forth below, as permitted by applicable law and regulation. Advisors may disclose non-public personal information about you to the funds in which you invest, to Advisors’ affiliates, and to non-affiliated companies that work with Advisors to service your account(s), or to provide services or process transactions that you have requested. Advisors may disclose non-public personal information in situations that may include, but are not limited to, in response to legal and/or regulatory inquiries and the proposed or actual sale, assignment merger or other transfer of all or a portion of Advisors’ business to another business entity. Advisors may also disclose non-public personal information about you to parties representing you, such as your investment representative, your accountant, your tax advisor, or to other third parties at your direction/consent. Advisors will not sell, rent, license or trade your personal and financial information to or with third parties for their own direct marketing use unless you give us general or specific consent to do so. If you decide to close your account(s) or become an inactive customer, Advisors will adhere to the privacy policies and practices as described in this notice. Advisors restricts access to your personal and account information to those employees who need to know that information to provide products and services to you. Advisors maintains reasonable and customary physical, electronic and procedural safeguards to guard your non-public personal information.
California residents may go to https://fundsus.dws.com/us/en-us/legal-resources/privacy-policy.html to obtain additional information relating to their rights under California state law.
Advisors reserves the right, at their discretion, to change, modify, add, or remove portions of this Privacy Policy Notice, and any of the policies described herein, at any time. Advisors will indicate any such changes to the Privacy Policy Notice at the privacy link which can be found at www.Xtrackers.com. At all times, you are bound by the then-current version of the Privacy Policy and all applicable laws. Advisors highly recommends that you review this Privacy Policy Notice from time to time to ensure that you are familiar with the most recent version. The examples contained in this Privacy Policy Notice are illustrations; they are not intended to be exclusive.
77
DBX ETF Trust
This report is intended for the shareholders of the DBX ETF Trust.
This report must be preceded or accompanied by a prospectus.
Investing involves risk, including the possible loss of principal. ESG criteria in a Fund’s investment strategy does not guarantee a return or protect against loss. Stocks may decline in value. Foreign investing involves greater and different risks than investing in US companies, including currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive company information, political instability and differing auditing and legal standards. Emerging markets tend to be more volatile and less liquid than the markets of more mature economies, and generally have less diverse and less mature economic structures and less stable political systems than those of developed countries. Stocks of medium-sized companies involve greater risk than securities of larger, more established companies. These Funds are currently non-diversified and can take larger positions in fewer issues, increasing its potential risk. Funds investing in a single industry, country or in a limited geographic region generally are more volatile than more diversified funds. Performance of a Fund may diverge from that of its Underlying Index due to operating expenses, transaction costs, cash flows, use of sampling strategies or operational inefficiencies. An investment in any Fund should be considered only as a supplement to a complete investment program for those investors willing to accept the risks associated with the Fund. Please read the prospectus for more information.
War, terrorism, economic uncertainty, trade disputes, public health crises (including the recent pandemic spread of the novel coronavirus) and related geopolitical events could lead to increased market volatility, disruption to U.S. and world economies and markets and may have significant adverse effects on the Funds and their investments.
Shares of the Funds are bought and sold at market price (not NAV) throughout the day on the NYSE Arca, Inc. Transactions in Fund shares may result in brokerage commissions and may generate tax consequences. There can be no assurance that an active trading market for shares of a Fund will develop or be maintained.
DBX ETF Trust Funds are distributed by ALPS Distributors, Inc. (“ALPS”). The Funds are managed by DBX Advisors LLC which is not affiliated with ALPS.
The brand DWS represents DWS Group GmbH & Co. KGaA and any of its subsidiaries such as DWS Distributors, Inc. which offers investment products or Deutsche Investment Management Americas Inc. and RREEF America L.L.C. which offer advisory services.
The Funds or securities referred to herein are not sponsored, endorsed, issued, sold or promoted by MSCI, and MSCI bears no liability with respect to any such Funds or securities or any index on which such Funds or securities are based. The prospectus contains a more detailed description of the limited relationship MSCI has with DBX Advisors LLC and any related funds.
The S&P 500 ESG Index is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”), and has been licensed for use by DBX Advisors. S&P® and S&P 500® are registered trademarks of Standard & Poor's Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by DBX Advisors. The ESG Scores used in the Index are calculated by SAM. DBX Advisors Xtrackers ETFs are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates or SAM, and none of such parties make any representation regarding the advisability of investing in such ETFs, nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 ESG Index.
Copyright © 2020 DWS Group. All rights reserved. XtrackersTM is a trademark of DWS Investment GmbH. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
Not FDIC Insured | No Bank Guarantee | May Lose Value
DBX ETF Trust
| Investment advisor DBX Advisors LLC 875 Third Avenue New York, NY 10022 |
Administrator, custodian, The Bank of New York Mellon 240 Greenwich Street New York, NY 10286 |
Distributor ALPS Distributors, Inc. 1290 Broadway Suite 1000 Denver, CO 80203 | ||
| Independent registered public accounting firm Ernst & Young LLP 5 Times Square New York, NY 10036 |
Legal counsel Dechert LLP 1095 Avenue of the Americas New York, NY 10036 |
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R-070013-2 (10/20) DBX004598 (10/21)
August 31, 2020
Annual Report
DBX ETF Trust
Xtrackers High Beta High Yield Bond ETF (HYUP)
Xtrackers Low Beta High Yield Bond ETF (HYDW)
Xtrackers Short Duration High Yield Bond ETF (SHYL)
Xtrackers USD High Yield Corporate Bond ETF (HYLB)
DBX ETF Trust
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| Schedule of Investments |
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To our Shareholders: (Unaudited)
Dear Shareholder,
We are pleased to provide this annual report for our ETFs tracking the fixed income market for the period ended August 31, 2020.
The global economy shrank at a record pace during the reporting period owing to COVID-19-driven collapse of economic activity. The pandemic severely affected the U.S. economy, as it was one of the worst hit countries in terms of COVID-19 infections. Consumer and business spending took a hit as nationwide lockdowns brought business activity to a halt. Labor markets also saw considerable weakness as record numbers of Americans filed for unemployment benefits; however, the gradual reopening of the economy led to some recovery. Though economic activity picked up momentum in May, a resurgence of COVID-19 infections hurt sentiments. The Eurozone economy plunged into recession owing to stringent lockdown measures implemented in the region. However, its success in containing infections, along with government stimulus, helped support an initial recovery.
Amid the global growth slowdown and containment activities, monetary and fiscal authorities globally offered unprecedented rescue packages on the back of benign inflation numbers. In light of evolving risks from COVID-19, the Federal Reserve Board (FRB) took a dovish stance, maintaining a near-zero policy rate in March 2020. Furthermore, given the proximity of interest rates to zero percent, the FRB reaffirmed that it is prepared to use its full range of tools to achieve its maximum employment and price stability goals. To keep the economy afloat, the US Congress passed the largest stimulus package ever, called the Coronavirus Aid, Relief and Economic Security (CARES) Act, worth USD2.2 trillion. The unusual stimulus packages along with gradual reopening of the economy buoyed U.S. equity markets to reach their all-time highs.
The high-yield spreads over U.S. treasuries crossed the 1,000 basis points (1 basis point = 0.01%) mark during the initial panic over the pandemic. However, the FRB’s foray into high yield debt put a lid on the yields and supported the high-yield bond prices at a level that otherwise would be unimaginable in a recession. The improved borrowing conditions led to the issuance in the U.S. high-yield bond markets to reach record levels. To address the unprecedented situation, the European Central Bank announced a Pandemic Emergency Purchase Programme (PEPP) worth 7.3% of Euro area GDP1. PEPP targets to enhance credit to businesses and households, as well as to support production and employment.
Second wave of COVID-19 infections, worsening trade relations with China and failure to reach an agreement on the second U.S. stimulus package are some major risks ahead of the U.S. economy. However, willingness of policymakers to provide unprecedented fiscal and monetary support, coupled with gradual reopening of the economy, should support an initial recovery. Given the unprecedented resources devoted to COVID-19 vaccine research by both the public and private sectors, positive surprises certainly appear possible.
Our team appreciates your trust and looks forward to serving your investment needs through innovative index-driven strategies.
Sincerely,
/s/ Freddi Klassen
Freddi Klassen
President and Chief Executive Officer
1The gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.
Assumptions, estimates and opinions contained in this document constitute our judgment as of the date of the document and are subject to change without notice. Any projections are based on a number of assumptions as to market conditions and there can be no guarantee that any projected results will be achieved. Past performance is not a guarantee of future results.
1
This Page is Intentionally Left Blank
2
DBX ETF Trust
Xtrackers High Beta High Yield Bond ETF (HYUP)
The Xtrackers High Beta High Yield Bond ETF (HYUP) seeks investment results that correspond generally to the performance, before fees and expenses, of the Solactive USD High Yield Corporates Total Market High Beta Index (the HYUP Index). The HYUP Index is designed to track the performance of the segment of the U.S. dollar denominated high yield corporate bond market that exhibits higher overall beta1 to the broader high yield corporate fixed income market. For the 12-month period ended August 31, 2020 HYUP shares returned 2.46%, compared to the HYUP Index return of 1.98%.
The majority of sectors contributed positively to performance with the greatest contribution coming from Consumer Non-Cyclical, Consumer Cyclical and Technology. Energy and Transportation were the only negative contributors to performance.
Xtrackers Low Beta High Yield Bond ETF (HYDW)
The Xtrackers Low Beta High Yield Bond ETF (HYDW) seeks investment results that correspond generally to the performance, before fees and expenses, of the Solactive USD High Yield Corporates Total Market Low Beta Index (the HYDW Index). The HYDW Index is designed to track the performance of the segment of the U.S. dollar denominated high yield corporate bond market that exhibits lower overall beta1 to the broader high yield corporate fixed income market. For the 12-month period ended August 31, 2020 HYDW shares returned 4.42%, compared to the HYDW Index return of 4.06%.
The majority of sectors contributed positively to performance with the greatest contribution coming from Communications, Consumer Non-Cyclical and Consumer Cyclical. Transportation was the only sector that detracted slightly from performance.
Xtrackers Short Duration High Yield Bond ETF (SHYL)
The Xtrackers Short Duration High Yield Bond ETF (SHYL) seeks investment results that correspond generally to the performance, before fees and expenses, of the Solactive USD High Yield Corporates Total Market 0-5 Year Index (the SHYL Index). The SHYL Index is designed to track the performance of high yield rated corporate bonds issued in USD with 0 to 5 years term to maturity. For the 12-month period ended August 31, 2020, SHYL shares returned 0.61%, compared to the SHYL Index return of 0.91%.
The majority of sectors contributed positively to performance with the greatest contribution coming from Consumer Cyclical, Consumer Non-Cyclical and Technology. Energy, Transportation and Communications were the only negative contributors to performance.
Xtrackers USD High Yield Corporate Bond ETF (HYLB)
The Xtrackers USD High Yield Corporate Bond ETF (HYLB) seeks investment results that correspond generally to the performance, before fees and expenses, of the Solactive USD High Yield Corporates Total Market Index (the HYLB Index). The HYLB Index is designed to track the performance of a basket of U.S. dollar denominated high yield liquid corporate bonds. For the 12-month period ended August 31, 2020, HYLB shares returned 2.91%, compared to the HYLB Index return of 3.29%.
The majority of sectors contributed positively to performance with the greatest contribution coming from Consumer Non-Cyclical, Consumer Cyclical and Communications. Energy and Transportation were the only negative contributors to performance.
1 Beta is a measure of a security’s price sensitivity (i.e., volatility) it reflects the rate of change in a security’s price that results from overall market movements.
*************************
Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance data visit www.Xtrackers.com. Returns assume that dividends and capital gains distributions have been reinvested. See pages 5-12 of this report for additional performance information, including performance data based on market value.
3
DBX ETF Trust
Management’s Discussion of Fund Performance (Unaudited) (Continued)
The views expressed in this report reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team’s views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Current and future portfolio holdings are subject to risk.
4
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers High Beta High Yield Bond ETF (HYUP)
The Xtrackers High Beta High Yield Bond ETF (the “Fund”), using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the Solactive USD High Yield Corporates Total Market High Beta Index (the “Underlying Index”). The Underlying Index is designed to track the performance of the segment of the U.S. dollar denominated high yield corporate bond market that exhibits higher overall beta to the broader high yield corporate fixed income market. It is not possible to invest directly into an index.
| Performance as of August 31, 2020 |
| Average Annual Total Returns | ||||||||
| Net Asset Value | Market Value | Solactive USD High Yield Corporates Total Market High Beta Index |
Solactive USD High Yield Corporates Total Market Index | |||||
| One Year |
2.46% | 2.34% | 1.98% | 3.29% | ||||
| Since Inception1 |
3.92% | 3.80% | 3.78% | 4.47% | ||||
| Cumulative Total Returns | ||||||||
| Net Asset Value | Market Value | Solactive USD High Yield Corporates Total Market High Beta Index |
Solactive USD High Yield Corporates Total Market Index | |||||
| One Year |
2.46% | 2.34% | 1.98% | 3.29% | ||||
| Since Inception1 |
10.67% | 10.36% | 10.28% | 12.23% | ||||
1 Total returns are calculated based on the commencement of operations, January 11, 2018 (“Inception”).
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.Xtrackers.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the sale of fund shares or redemption of fund creation units. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are sold in the market or redeemed. Performance for certain funds may reflect a waiver of a portion of the unitary advisory fee. Without such waiver, performance would have been lower. The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated December 20, 2019, was 0.35%, and may differ from the expense ratio disclosed in the Financial Highlights table in this report.
The Fund’s net asset value or “NAV” is calculated by dividing the value of the Fund’s total assets less total liabilities by the number of shares outstanding. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
5
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers High Beta High Yield Bond ETF (HYUP) (Continued)
* As a percent of total investments excluding securities lending collateral and cash equivalents.
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund’s investment portfolio see page 14.
6
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers Low Beta High Yield Bond ETF (HYDW)
The Xtrackers Low Beta High Yield Bond ETF (the “Fund”), using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the Solactive USD High Yield Corporates Total Market Low Beta Index (the “Underlying Index”). The Underlying Index is designed to track the performance of the segment of the U.S. dollar denominated high yield corporate bond market that exhibits lower overall beta to the broader high yield corporate fixed income market. It is not possible to invest directly into an index.
| Performance as of August 31, 2020 |
| Average Annual Total Returns | ||||||||
| Net Asset Value | Market Value | Solactive USD High Yield Corporates Total Market Low Beta Index |
Solactive USD High Yield Corporates Total Market Index | |||||
| One Year |
4.42% | 4.52% | 4.06% | 3.29% | ||||
| Since Inception1 |
4.87% | 4.88% | 4.82% | 4.47% | ||||
| Cumulative Total Returns | ||||||||
| Net Asset Value | Market Value | Solactive USD High Yield Corporates Total Market Low Beta Index |
Solactive USD High Yield Corporates Total Market Index | |||||
| One Year |
4.42% | 4.52% | 4.06% | 3.29% | ||||
| Since Inception1 |
13.37% | 13.40% | 13.24% | 12.23% | ||||
1 Total returns are calculated based on the commencement of operations, January 11, 2018 (“Inception”).
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.Xtrackers.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the sale of fund shares or redemption of fund creation units. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are sold in the market or redeemed. Performance for certain funds may reflect a waiver of a portion of the unitary advisory fee. Without such waiver, performance would have been lower. The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated December 20, 2019, was 0.25%, and may differ from the expense ratio disclosed in the Financial Highlights table in this report.
The Fund’s net asset value or “NAV” is calculated by dividing the value of the Fund’s total assets less total liabilities by the number of shares outstanding. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
7
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers Low Beta High Yield Bond ETF (HYDW) (Continued)
* As a percent of total investments excluding securities lending collateral and cash equivalents.
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund’s investment portfolio see page 20.
8
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers Short Duration High Yield Bond ETF (SHYL)
The Xtrackers Short Duration High Yield Bond ETF (the “Fund”), using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the Solactive USD High Yield Corporates Total Market 0-5 Year Index (the “Underlying Index”). The Underlying Index is designed to track the performance of short-term publicly issued U.S. dollar-denominated below investment grade corporate debt. It is not possible to invest directly into an index.
| Performance as of August 31, 2020 |
| Average Annual Total Returns | ||||||||
| Net Asset Value | Market Value | Solactive USD High Yield Corporates Total Market 0-5 Year Index |
Solactive USD High Yield Corporates Total Market Index | |||||
| One Year |
0.61% | 0.64% | 0.91% | 3.29% | ||||
| Since Inception1 |
2.94% | 2.88% | 3.07% | 4.34% | ||||
| Cumulative Total Returns | ||||||||
| Net Asset Value | Market Value | Solactive USD High Yield Corporates Total Market 0-5 Year Index |
Solactive USD High Yield Corporates Total Market Index | |||||
| One Year |
0.61% | 0.64% | 0.91% | 3.29% | ||||
| Since Inception1 |
7.96% | 7.79% | 8.32% | 11.90% | ||||
1 Total returns are calculated based on the commencement of operations, January 10, 2018 (“Inception”).
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.Xtrackers.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the sale of fund shares or redemption of fund creation units. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are sold in the market or redeemed. Performance for certain funds may reflect a waiver of a portion of the unitary advisory fee. Without such waiver, performance would have been lower. The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated December 20, 2019, was 0.20%, and may differ from the expense ratio disclosed in the Financial Highlights table in this report.
The Fund’s net asset value or “NAV” is calculated by dividing the value of the Fund’s total assets less total liabilities by the number of shares outstanding. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
9
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers Short Duration High Yield Bond ETF (SHYL) (Continued)
* As a percent of total investments excluding securities lending collateral and cash equivalents.
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund’s investment portfolio see page 31.
10
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers USD High Yield Corporate Bond ETF (HYLB)
The Xtrackers USD High Yield Corporate Bond ETF (the “Fund”), using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, before fees and expenses, of the Solactive USD High Yield Corporates Total Market Index (the “Underlying Index”). The Underlying Index is designed to track the performance of a basket of U.S. dollar-denominated high yield liquid corporate bonds. It is not possible to invest directly into an index.
| Performance as of August 31, 2020 |
| Average Annual Total Returns | ||||||||
| Net Asset Value | Market Value | Solactive USD High Yield Corporates Total Market Index |
iBoxx USD Liquid High Yield Index | |||||
| One Year |
2.91% | 2.93% | 3.29% | 3.20% | ||||
| Since Inception1 |
5.07% | 5.03% | 5.36% | 5.30% | ||||
| Cumulative Total Returns | ||||||||
| Net Asset Value | Market Value | Solactive USD High Yield Corporates Total Market Index |
iBoxx USD Liquid High Yield Index | |||||
| One Year |
2.91% | 2.93% | 3.29% | 3.20% | ||||
| Since Inception1 |
20.29% | 20.14% | 21.54% | 21.26% | ||||
1 Total returns are calculated based on the commencement of operations, December 7, 2016 (“Inception”).
Past performance is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end is available at www.Xtrackers.com. Performance results assume reinvestment of all dividends and capital gain distributions and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the sale of fund shares or redemption of fund creation units. The investment return and principal value of shares will vary with changes in market conditions. Shares may be worth more or less than their original cost when they are sold in the market or redeemed. Performance for certain funds may reflect a waiver of a portion of the unitary advisory fee. Without such waiver, performance would have been lower. The gross expense ratio of the Fund, as stated in the fee table of the prospectus dated December 20, 2019, was 0.20%, and may differ from the expense ratio disclosed in the Financial Highlights table in this report.
The Fund’s net asset value or “NAV” is calculated by dividing the value of the Fund’s total assets less total liabilities by the number of shares outstanding. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of a fund may not have traded in the secondary market until after the fund’s inception, for the period from inception to the first day of secondary trading, the NAV of the fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV, respectively.
An index is a statistical composite that tracks a specified financial market or sector. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower.
11
DBX ETF Trust
Performance Summary (Unaudited)
Xtrackers USD High Yield Corporate Bond ETF (HYLB) (Continued)
* As a percent of total investments excluding securities lending collateral and cash equivalents.
Portfolio holdings and characteristics are subject to change. For more complete details about the Fund’s investment portfolio see page 40.
12
DBX ETF Trust
As a shareholder of one or more of the Funds, you incur two types of costs: (1) transaction costs, including brokerage commissions paid on purchases and sales of fund shares, and (2) ongoing costs, including unitary advisory fees and other Fund expenses. In the most recent six-month period the Funds limited these expenses; had they not done so, expenses would have been higher. The expense examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds.
The examples in the tables are based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (March 1, 2020 to August 31, 2020).
Actual expenses
The first line in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The second line in the following tables provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses (which is not the Funds’ actual return). The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only, and do not reflect any transactional costs. Therefore the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value March 1, 2020 |
Ending Account Value August 31, 2020 |
Annualized Expense Ratio |
Expenses Paid During the Period Per $1,000(1) |
|||||||||||||
| Xtrackers High Beta High Yield Bond ETF |
| |||||||||||||||
| Actual |
$ | 1,000.00 | $ | 1,017.80 | 0.20 | % | $1.01 | |||||||||
| Hypothetical (5% return before expenses) |
$ | 1,000.00 | $ | 1,024.13 | 0.20 | % | $1.02 | |||||||||
| Xtrackers Low Beta High Yield Bond ETF |
| |||||||||||||||
| Actual |
$ | 1,000.00 | $ | 1,037.00 | 0.20 | % | $1.02 | |||||||||
| Hypothetical (5% return before expenses) |
$ | 1,000.00 | $ | 1,024.13 | 0.20 | % | $1.02 | |||||||||
| Xtrackers Short Duration High Yield Bond ETF |
| |||||||||||||||
| Actual |
$ | 1,000.00 | $ | 1,003.30 | 0.20 | % | $1.01 | |||||||||
| Hypothetical (5% return before expenses) |
$ | 1,000.00 | $ | 1,024.13 | 0.20 | % | $1.02 | |||||||||
| Xtrackers USD High Yield Corporate Bond ETF |
| |||||||||||||||
| Actual |
$ | 1,000.00 | $ | 1,022.50 | 0.15 | % | $0.76 | |||||||||
| Hypothetical (5% return before expenses) |
$ | 1,000.00 | $ | 1,024.38 | 0.15 | % | $0.76 | |||||||||
(1) Expenses are equal to each Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184 (the number of days in the most recent six-month period), then divided by 366.
13
DBX ETF Trust
Schedule of Investments
Xtrackers High Beta High Yield Bond ETF
August 31, 2020
| See Notes to Financial Statements. | 14 |
DBX ETF Trust
Schedule of Investments
Xtrackers High Beta High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 15 |
DBX ETF Trust
Schedule of Investments
Xtrackers High Beta High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 16 |
DBX ETF Trust
Schedule of Investments
Xtrackers High Beta High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 17 |
DBX ETF Trust
Schedule of Investments
Xtrackers High Beta High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 18 |
DBX ETF Trust
Schedule of Investments
Xtrackers High Beta High Yield Bond ETF (Continued)
August 31, 2020
A summary of the Fund’s transactions with affiliated investments during the year ended August 31, 2020 is as follows:
| Value ($) at 8/31/2019 |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/(Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital Gain Distributions ($) |
Number of Shares at 8/31/2020 |
Value ($) at 8/31/2020 |
||||||||||||||||||||||||||||
| SECURITIES LENDING COLLATERAL — 2.4% |
| |||||||||||||||||||||||||||||||||||
| DWS Government & Agency Securities Portfolio “DWS Government Cash Institutional Shares”, 0.04% (b)(c) |
| |||||||||||||||||||||||||||||||||||
| 9,810,481 | — | (9,641,903 | )(d) | — | — | 88,198 | — | 168,578 | 168,578 | |||||||||||||||||||||||||||
| CASH EQUIVALENTS — 7.2% |
| |||||||||||||||||||||||||||||||||||
| DWS Government Money Market Series “Institutional Shares”, 0.06% (b) |
| |||||||||||||||||||||||||||||||||||
| 2,360,073 | 23,261,916 | (25,118,465 | ) | — | — | 9,579 | — | 503,524 | 503,524 | |||||||||||||||||||||||||||
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| 12,170,554 | 23,261,916 | (34,760,368 | ) | — | — | 97,777 | — | 672,102 | 672,102 | |||||||||||||||||||||||||||
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| (a) | All or a portion of these securities were on loan. In addition, “Other assets and liabilities, net” may include pending sales that are also on loan. The value of securities loaned at August 31, 2020 amounted to $264,689, which is 3.8% of net assets. |
| (b) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (c) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $104,830. |
| (d) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the year ended August 31, 2020. |
| 144A: | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2020 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.
| Assets |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Corporate Bonds (e) |
$ | — | $ | 6,680,628 | $ | — | $ | 6,680,628 | ||||||||
| Short-Term Investments (e) |
672,102 | — | — | 672,102 | ||||||||||||
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| TOTAL |
$ | 672,102 | $ | 6,680,628 | $ | — | $ | 7,352,730 | ||||||||
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|||||||||
| (e) | See Schedule of Investments for additional detailed categorizations. |
| See Notes to Financial Statements. | 19 |
DBX ETF Trust
Schedule of Investments
Xtrackers Low Beta High Yield Bond ETF
August 31, 2020
| See Notes to Financial Statements. | 20 |
DBX ETF Trust
Schedule of Investments
Xtrackers Low Beta High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 21 |
DBX ETF Trust
Schedule of Investments
Xtrackers Low Beta High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 22 |
DBX ETF Trust
Schedule of Investments
Xtrackers Low Beta High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 23 |
DBX ETF Trust
Schedule of Investments
Xtrackers Low Beta High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 24 |
DBX ETF Trust
Schedule of Investments
Xtrackers Low Beta High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 25 |
DBX ETF Trust
Schedule of Investments
Xtrackers Low Beta High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 26 |
DBX ETF Trust
Schedule of Investments
Xtrackers Low Beta High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 27 |
DBX ETF Trust
Schedule of Investments
Xtrackers Low Beta High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 28 |
DBX ETF Trust
Schedule of Investments
Xtrackers Low Beta High Yield Bond ETF (Continued)
August 31, 2020
A summary of the Fund’s transactions with affiliated investments during the year ended August 31, 2020 is as follows:
| Value ($) at 8/31/2019 |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/(Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital Gain Distributions ($) |
Number of Shares at 8/31/2020 |
Value ($) at 8/31/2020 |
||||||||||||||||||||||||||||
| SECURITIES LENDING COLLATERAL — 1.6% |
| |||||||||||||||||||||||||||||||||||
| DWS Government & Agency Securities Portfolio “DWS Government Cash Institutional Shares”, 0.04% (b)(c) |
| |||||||||||||||||||||||||||||||||||
| 1,219,663 | — | (606,674 | )(d) | — | — | 5,347 | — | 612,989 | 612,989 | |||||||||||||||||||||||||||
| CASH EQUIVALENTS — 2.9% |
| |||||||||||||||||||||||||||||||||||
| DWS Government Money Market Series “Institutional Shares”, 0.06% (b) |
| |||||||||||||||||||||||||||||||||||
| 1,864,770 | 43,113,459 | (43,861,848 | ) | — | — | 13,006 | — | 1,116,381 | 1,116,381 | |||||||||||||||||||||||||||
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| 3,084,433 | 43,113,459 | (44,468,522 | ) | — | — | 18,353 | — | 1,729,370 | 1,729,370 | |||||||||||||||||||||||||||
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| (a) | All or a portion of these securities were on loan. In addition, “Other assets and liabilities, net” may include pending sales that are also on loan. The value of securities loaned at August 31, 2020 amounted to $700,686, which is 1.9% of net assets. |
| (b) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (c) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $110,490. |
| (d) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the year ended August 31, 2020. |
| GMTN: | Global Medium Term Note |
| MTN: | Medium Term Note |
| 144A: | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
| See Notes to Financial Statements. | 29 |
DBX ETF Trust
Schedule of Investments
Xtrackers Low Beta High Yield Bond ETF (Continued)
August 31, 2020
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2020 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.
| Assets |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Corporate Bonds (e) |
$ | — | $ | 37,401,493 | $ | — | $ | 37,401,493 | ||||||||
| Short-Term Investments (e) |
1,729,370 | — | — | 1,729,370 | ||||||||||||
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|
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|
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|
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|||||||||
| TOTAL |
$ | 1,729,370 | $ | 37,401,493 | $ | — | $ | 39,130,863 | ||||||||
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|||||||||
| (e) | See Schedule of Investments for additional detailed categorizations. |
| See Notes to Financial Statements. | 30 |
DBX ETF Trust
Schedule of Investments
Xtrackers Short Duration High Yield Bond ETF
August 31, 2020
| See Notes to Financial Statements. | 31 |
DBX ETF Trust
Schedule of Investments
Xtrackers Short Duration High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 32 |
DBX ETF Trust
Schedule of Investments
Xtrackers Short Duration High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 33 |
DBX ETF Trust
Schedule of Investments
Xtrackers Short Duration High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 34 |
DBX ETF Trust
Schedule of Investments
Xtrackers Short Duration High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 35 |
DBX ETF Trust
Schedule of Investments
Xtrackers Short Duration High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 36 |
DBX ETF Trust
Schedule of Investments
Xtrackers Short Duration High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 37 |
DBX ETF Trust
Schedule of Investments
Xtrackers Short Duration High Yield Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 38 |
DBX ETF Trust
Schedule of Investments
Xtrackers Short Duration High Yield Bond ETF (Continued)
August 31, 2020
A summary of the Fund’s transactions with affiliated investments during the year ended August 31, 2020 is as follows:
| Value ($) at 8/31/2019 |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/(Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital Gain Distributions ($) |
Number of Shares at 8/31/2020 |
Value ($) at 8/31/2020 |
||||||||||||||||||||||||||||
| SECURITIES LENDING COLLATERAL — 4.9% |
| |||||||||||||||||||||||||||||||||||
| DWS Government & Agency Securities Portfolio “DWS Government Cash Institutional Shares”, 0.04% (b)(c) |
| |||||||||||||||||||||||||||||||||||
| 1,835,191 | — | (19,561 | )(d) | — | — | 12,551 | — | 1,815,630 | 1,815,630 | |||||||||||||||||||||||||||
| CASH EQUIVALENTS — 4.5% |
| |||||||||||||||||||||||||||||||||||
| DWS Government Money Market Series “Institutional Shares”, 0.06% (b) |
| |||||||||||||||||||||||||||||||||||
| 311,842 | 21,393,112 | (20,034,952 | ) | — | — | 5,751 | — | 1,670,002 | 1,670,002 | |||||||||||||||||||||||||||
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| 2,147,033 | 21,393,112 | (20,054,513 | ) | — | — | 18,302 | — | 3,485,632 | 3,485,632 | |||||||||||||||||||||||||||
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| (a) | All or a portion of these securities were on loan. In addition, “Other assets and liabilities, net” may include pending sales that are also on loan. The value of securities loaned at August 31, 2020 amounted to $1,955,484, which is 5.2% of net assets. |
| (b) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (c) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $219,713. |
| (d) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the year ended August 31, 2020. |
| MTN: | Medium Term Note |
| 144A: | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2020 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.
| Assets |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Corporate Bonds (e) |
$ | — | $ | 36,039,490 | $ | — | $ | 36,039,490 | ||||||||
| Short-Term Investments (e) |
3,485,632 | — | — | 3,485,632 | ||||||||||||
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|
|||||||||
| TOTAL |
$ | 3,485,632 | $ | 36,039,490 | $ | — | $ | 39,525,122 | ||||||||
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|||||||||
| (e) | See Schedule of Investments for additional detailed categorizations. |
| See Notes to Financial Statements. | 39 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF
August 31, 2020
| See Notes to Financial Statements. | 40 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 41 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 42 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 43 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 44 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 45 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 46 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 47 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 48 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 49 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 50 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 51 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 52 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 53 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 54 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 55 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
| See Notes to Financial Statements. | 56 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
A summary of the Fund’s transactions with affiliated investments during the year ended August 31, 2020 is as follows:
| Value ($) at 8/31/2019 |
Purchases Cost ($) |
Sales Proceeds ($) |
Net Realized Gain/(Loss) ($) |
Net Change in Unrealized Appreciation (Depreciation) ($) |
Income ($) | Capital Gain Distributions ($) |
Number of Shares at 8/31/2020 |
Value ($) at 8/31/2020 |
||||||||||||||||||||||||||||
| SECURITIES LENDING COLLATERAL — 2.2% |
| |||||||||||||||||||||||||||||||||||
| DWS Government & Agency Securities Portfolio “DWS Government Cash Institutional Shares”, 0.04% (b)(c) |
| |||||||||||||||||||||||||||||||||||
| 161,595,001 | — | (26,682,101 | )(d) | — | — | 1,513,388 | — | 134,912,900 | 134,912,900 | |||||||||||||||||||||||||||
| CASH EQUIVALENTS — 1.7% |
| |||||||||||||||||||||||||||||||||||
| DWS Government Money Market Series “Institutional Shares”, 0.06%(b) |
| |||||||||||||||||||||||||||||||||||
| 36,745,383 | 853,967,932 | (787,076,699 | ) | — | — | 237,075 | — | 103,636,616 | 103,636,616 | |||||||||||||||||||||||||||
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| 198,340,384 | 853,967,932 | (813,758,800 | ) | — | — | 1,750,463 | — | 238,549,516 | 238,549,516 | |||||||||||||||||||||||||||
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| (a) | All or a portion of these securities were on loan. In addition, “Other assets and liabilities, net” may include pending sales that are also on loan. The value of securities loaned at August 31, 2020 amounted to $142,667,108, which is 2.3% of net assets. |
| (b) | Affiliated fund managed by DWS Investment Management Americas, Inc. The rate shown is the annualized seven-day yield at period end. |
| (c) | Represents cash collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates. In addition, the Fund held non-cash U.S. Treasury securities collateral having a value of $13,451,281. |
| (d) | Represents the net increase (purchase cost) or decrease (sales proceeds) in the amount invested in cash collateral for the year ended August 31, 2020. |
| GMTN: | Global Medium Term Note |
| MTN: | Medium Term Note |
| 144A: | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. |
| See Notes to Financial Statements. | 57 |
DBX ETF Trust
Schedule of Investments
Xtrackers USD High Yield Corporate Bond ETF (Continued)
August 31, 2020
Fair Value Measurements
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds and credit risk). Level 3 includes significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2020 in valuing the Fund’s investments. For information on the Fund’s policy regarding the valuation of investments, please refer to the Security Valuation section of Note 2 in the accompanying Notes to Financial Statements.
| Assets |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Corporate Bonds (e) |
$ | — | $ | 6,110,374,718 | $ | — | $ | 6,110,374,718 | ||||||||
| Short-Term Investments (e) |
238,549,516 | — | — | 238,549,516 | ||||||||||||
|
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|
|
|
|
|
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|
|||||||||
| TOTAL |
$ | 238,549,516 | $ | 6,110,374,718 | $ | — | $ | 6,348,924,234 | ||||||||
|
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|
|
|||||||||
| (e) | See Schedule of Investments for additional detailed categorizations. |
| See Notes to Financial Statements. | 58 |
DBX ETF Trust
August 31, 2020
| Xtrackers High Beta High Yield Bond ETF |
Xtrackers Low Beta High Yield Bond ETF |
Xtrackers Short Duration High Yield Bond ETF |
Xtrackers USD High Yield Corporate Bond ETF |
|||||||||||||
| Assets |
||||||||||||||||
| Investment in non-affiliated securities at value |
$ | 6,680,628 | $ | 37,401,493 | $ | 36,039,490 | $ | 6,110,374,718 | ||||||||
| Investment in DWS Government Money Market Series |
503,524 | 1,116,381 | 1,670,002 | 103,636,616 | ||||||||||||
| Investment in DWS Government & Agency Securities Portfolio* |
168,578 | 612,989 | 1,815,630 | 134,912,900 | ||||||||||||
| Cash |
— | — | — | 129,350 | ||||||||||||
| Due from advisor |
2,007 | 3,430 | 3,835 | 5,943 | ||||||||||||
| Receivables: | ||||||||||||||||
| Investment securities sold |
588,760 | 2,728,510 | 355,013 | 298,774,553 | ||||||||||||
| Capital shares |
— | — | — | 46,382,076 | ||||||||||||
| Interest |
110,051 | 474,793 | 581,443 | 90,793,524 | ||||||||||||
| Securities lending income |
2,387 | 380 | 1,068 | 74,456 | ||||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Total assets |
$ | 8,055,935 | $ | 42,337,976 | $ | 40,466,481 | $ | 6,785,084,136 | ||||||||
|
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|
|||||||||
| Liabilities |
||||||||||||||||
| Payable upon return of securities loaned |
$ | 168,578 | $ | 612,989 | $ | 1,815,630 | $ | 134,912,900 | ||||||||
| Payables: | ||||||||||||||||
| Investment securities purchased |
643,197 | 3,835,163 | 1,384,888 | 343,256,803 | ||||||||||||
| Capital shares |
— | — | — | 97,642,476 | ||||||||||||
| Investment advisory fees |
10,047 | 16,115 | 6,238 | 721,466 | ||||||||||||
| Other |
252,255 | — | — | — | ||||||||||||
|
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|
|
|
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|
|
|||||||||
| Total liabilities |
1,074,077 | 4,464,267 | 3,206,756 | 576,533,645 | ||||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Net Assets, at value |
$ | 6,981,858 | $ | 37,873,709 | $ | 37,259,725 | $ | 6,208,550,491 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Assets Consist of |
||||||||||||||||
| Paid-in capital |
$ | 17,571,448 | $ | 41,330,393 | $ | 36,828,160 | $ | 6,261,766,710 | ||||||||
| Distributable earnings (loss) |
(10,589,590 | ) | (3,456,684 | ) | 431,565 | (53,216,219 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Assets, at value |
$ | 6,981,858 | $ | 37,873,709 | $ | 37,259,725 | $ | 6,208,550,491 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Number of Common Shares outstanding |
150,001 | 750,001 | 800,001 | 127,150,001 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Asset Value |
$ | 46.55 | $ | 50.50 | $ | 46.57 | $ | 48.83 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Investment in non-affiliated securities at cost |
$ | 6,676,222 | $ | 36,549,106 | $ | 34,500,091 | $ | 6,068,130,511 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Value of securities loaned |
$ | 264,689 | $ | 700,686 | $ | 1,955,484 | $ | 142,667,108 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Investment in DWS Government Money Market Series at cost |
$ | 503,524 | $ | 1,116,381 | $ | 1,670,002 | $ | 103,636,616 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Investment in DWS Government & Agency Securities Portfolio at cost* |
$ | 168,578 | $ | 612,989 | $ | 1,815,630 | $ | 134,912,900 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-cash collateral for securities on loan |
$ | 104,830 | $ | 110,490 | $ | 219,713 | $ | 13,451,281 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| * | Represents collateral on securities loaned. |
| See Notes to Financial Statements. | 59 |
DBX ETF Trust
For the Year Ended August 31, 2020
| Xtrackers High Beta High Yield Bond ETF |
Xtrackers Low Beta High Yield Bond ETF |
Xtrackers Short Duration High Yield Bond ETF |
Xtrackers USD High Yield Corporate Bond ETF |
|||||||||||||
| Investment Income |
||||||||||||||||
| Unaffiliated interest income |
$ | 8,990,178 | $ | 6,423,596 | $ | 2,557,554 | $ | 229,894,298 | ||||||||
| Income distributions from affiliated funds |
9,579 | 13,006 | 5,751 | 237,075 | ||||||||||||
| Affiliated securities lending income |
88,198 | 5,347 | 12,551 | 1,513,388 | ||||||||||||
| Unaffiliated securities lending income, net of borrower rebates |
17,093 | — | 9,138 | 28,963 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total investment income |
9,105,048 | 6,441,949 | 2,584,994 | 231,673,724 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Expenses |
||||||||||||||||
| Investment advisory fees |
475,716 | 375,830 | 81,672 | 8,546,918 | ||||||||||||
| Other expenses |
400 | 1,143 | 171 | 6,143 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total expenses |
476,116 | 376,973 | 81,843 | 8,553,061 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Less fees waived (see note 3): |
||||||||||||||||
| Waiver |
(204,683 | ) | (76,260 | ) | (566 | ) | (2,157,629 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net expenses |
271,433 | 300,713 | 81,277 | 6,395,432 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net investment income (loss) |
8,833,615 | 6,141,236 | 2,503,717 | 225,278,292 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Realized and Unrealized Gain (Loss) |
||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments |
(8,447,625 | ) | (2,280,051 | ) | (1,047,532 | ) | (128,213,154 | ) | ||||||||
| In-kind redemptions |
(93,371 | ) | 6,570,070 | 2,253,402 | 43,331,357 | |||||||||||
| Foreign currency transactions |
(21,119 | ) | 255 | — | — | |||||||||||
| Payments by Affiliates (see note 8) |
2,007 | 3,430 | 3,835 | 5,943 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net realized gain (loss) |
(8,560,108 | ) | 4,293,704 | 1,209,705 | (84,875,854 | ) | ||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
| Investments |
2,181,907 | (2,775,645 | ) | 1,585,148 | 18,508,043 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net change in unrealized appreciation (depreciation) |
2,181,907 | (2,775,645 | ) | 1,585,148 | 18,508,043 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net realized and unrealized gain (loss) on investments and foreign currency transactions |
(6,378,201 | ) | 1,518,059 | 2,794,853 | (66,367,811 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Increase (Decrease) in Net Assets Resulting from Operations |
$ | 2,455,414 | $ | 7,659,295 | $ | 5,298,570 | $ | 158,910,481 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| See Notes to Financial Statements. | 60 |
DBX ETF Trust
| Xtrackers High Beta High Yield Bond ETF |
Xtrackers Low Beta High Yield Bond ETF |
|||||||||||||||
| Year Ended August 31, 2020 |
Year Ended August 31, 2019 |
Year Ended August 31, 2020 |
Year Ended August 31, 2019 |
|||||||||||||
| Increase (Decrease) in Net Assets from Operations |
||||||||||||||||
| Net investment income (loss) |
$ | 8,833,615 | $ | 10,122,442 | $ | 6,141,236 | $ | 6,561,539 | ||||||||
| Net realized gain (loss) |
(8,560,108 | ) | (2,102,427 | ) | 4,293,704 | (873,902 | ) | |||||||||
| Net change in net unrealized appreciation (depreciation) |
2,181,907 | 422,918 | (2,775,645 | ) | 5,099,880 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in net assets resulting from operations |
2,455,414 | 8,442,933 | 7,659,295 | 10,787,517 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Distributions to Shareholders |
(9,663,912 | ) | (10,069,325 | ) | (7,126,652 | ) | (6,517,014 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Fund Shares Transactions |
||||||||||||||||
| Proceeds from shares sold |
— | 4,812,681 | 54,342,652 | 7,295,389 | ||||||||||||
| Value of shares redeemed |
(136,509,024 | ) | — | (161,280,463 | ) | (4,928,829 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in net assets resulting from fund share transactions |
(136,509,024 | ) | 4,812,681 | (106,937,811 | ) | 2,366,560 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total net increase (decrease) in Net Assets |
(143,717,522 | ) | 3,186,289 | (106,405,168 | ) | 6,637,063 | ||||||||||
| Net Assets |
||||||||||||||||
| Beginning of year |
150,699,380 | 147,513,091 | 144,278,877 | 137,641,814 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| End of year |
$ | 6,981,858 | $ | 150,699,380 | $ | 37,873,709 | $ | 144,278,877 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Changes in Shares Outstanding |
||||||||||||||||
| Shares outstanding, beginning of year |
3,100,001 | 3,000,001 | 2,850,001 | 2,800,001 | ||||||||||||
| Shares sold |
— | 100,000 | 1,100,000 | 150,000 | ||||||||||||
| Shares redeemed |
(2,950,000 | ) | — | (3,200,000 | ) | (100,000 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Shares outstanding, end of year |
150,001 | 3,100,001 | 750,001 | 2,850,001 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| See Notes to Financial Statements. | 61 |
DBX ETF Trust
Statements of Changes in Net Assets (Continued)
| Xtrackers Short Duration High Yield Bond ETF |
Xtrackers USD High Yield Corporate Bond ETF |
|||||||||||||||
| Year Ended August 31, 2020 |
Year Ended August 31, 2019 |
Year Ended August 31, 2020 |
Year Ended August 31, 2019 |
|||||||||||||
| Increase (Decrease) in Net Assets from Operations |
||||||||||||||||
| Net investment income (loss) |
$ | 2,503,717 | $ | 1,944,205 | $ | 225,278,292 | $ | 147,169,295 | ||||||||
| Net realized gain (loss) |
1,209,705 | (839,403 | ) | (84,875,854 | ) | (6,584,462 | ) | |||||||||
| Net change in net unrealized appreciation (depreciation) |
1,585,148 | 177,009 | 18,508,043 | 34,976,324 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in net assets resulting from operations |
5,298,570 | 1,281,811 | 158,910,481 | 175,561,157 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Distributions to Shareholders |
(2,545,587 | ) | (2,014,987 | ) | (231,469,345 | ) | (141,405,511 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Fund Shares Transactions |
||||||||||||||||
| Proceeds from shares sold |
175,438,715 | 12,264,827 | 8,095,596,847 | 2,772,020,595 | ||||||||||||
| Value of shares redeemed |
(163,041,545 | ) | (29,177,886 | ) | (4,876,338,905 | ) | (1,539,942,869 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in net assets resulting from fund share transactions |
12,397,170 | (16,913,059 | ) | 3,219,257,942 | 1,232,077,726 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total net increase (decrease) in Net Assets |
15,150,153 | (17,646,235 | ) | 3,146,699,078 | 1,266,233,372 | |||||||||||
| Net Assets |
||||||||||||||||
| Beginning of year |
22,109,572 | 39,755,807 | 3,061,851,413 | 1,795,618,041 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| End of year |
$ | 37,259,725 | $ | 22,109,572 | $ | 6,208,550,491 | $ | 3,061,851,413 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Changes in Shares Outstanding |
||||||||||||||||
| Shares outstanding, beginning of year |
450,001 | 800,001 | 60,950,001 | 36,000,001 | ||||||||||||
| Shares sold |
4,100,000 | 250,000 | 169,850,000 | 56,450,000 | ||||||||||||
| Shares redeemed |
(3,750,000 | ) | (600,000 | ) | (103,650,000 | ) | (31,500,000 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Shares outstanding, end of year |
800,001 | 450,001 | 127,150,001 | 60,950,001 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| See Notes to Financial Statements. | 62 |
DBX ETF Trust
| Xtrackers High Beta High Yield Bond ETF Selected Per Share Data |
Years Ended August 31, | Period Ended 8/31/2018(a) |
||||||||||
| 2020 | 2019 | |||||||||||
| Net Asset Value, beginning of period |
$ | 48.61 | $ | 49.17 | $ | 50.00 | ||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from investment operations: | ||||||||||||
| Net investment income (loss)(b) |
3.01 | (c) | 3.32 | 2.07 | ||||||||
| Net realized and unrealized gain (loss) |
(1.95 | )(c) | (0.58 | ) | (1.11 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Total from investment operations |
1.06 | 2.74 | 0.96 | |||||||||
|
|
|
|
|
|
|
|||||||
| Less distributions from: |
| |||||||||||
| Net investment income |
(3.12 | ) | (3.30 | ) | (1.79 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Total distributions |
(3.12 | ) | (3.30 | ) | (1.79 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net Asset Value, end of period |
$ | 46.55 | $ | 48.61 | $ | 49.17 | ||||||
|
|
|
|
|
|
|
|||||||
| Total Return (%) |
2.46 | (d) | 5.90 | (d) | 2.01 | ** | ||||||
| Ratios to Average Net Assets and Supplemental Data |
||||||||||||
| Net Assets, end of period ($ millions) |
7 | 151 | 148 | |||||||||
| Ratio of expenses before fee waiver (%) |
0.35 | 0.35 | 0.35 | * | ||||||||
| Ratio of expenses after fee waiver (%) |
0.20 | 0.31 | 0.35 | * | ||||||||
| Ratio of net investment income (loss) (%) |
6.50 | (c) | 6.91 | 6.71 | * | |||||||
| Portfolio turnover rate (%)(e) |
98 | 51 | 34 | ** | ||||||||
| Xtrackers Low Beta High Yield Bond ETF Selected Per Share Data |
Years Ended August 31, | Period Ended 8/31/2018(a) |
||||||||||
| 2020 | 2019 | |||||||||||
| Net Asset Value, beginning of period |
$ | 50.62 | $ | 49.16 | $ | 50.00 | ||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from investment operations: | ||||||||||||
| Net investment income (loss)(b) |
2.02 | (c) | 2.29 | 1.37 | ||||||||
| Net realized and unrealized gain (loss) |
0.12 | (c) | 1.44 | (1.05 | ) | |||||||
|
|
|
|
|
|
|
|||||||
| Total from investment operations |
2.14 | 3.73 | 0.32 | |||||||||
|
|
|
|
|
|
|
|||||||
| Less distributions from: |
| |||||||||||
| Net investment income |
(2.26 | ) | (2.27 | ) | (1.16 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Total distributions |
(2.26 | ) | (2.27 | ) | (1.16 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net Asset Value, end of period |
$ | 50.50 | $ | 50.62 | $ | 49.16 | ||||||
|
|
|
|
|
|
|
|||||||
| Total Return (%) |
4.42 | (d) | 7.84 | (d) | 0.68 | ** | ||||||
| Ratios to Average Net Assets and Supplemental Data |
||||||||||||
| Net Assets, end of period ($ millions) |
38 | 144 | 138 | |||||||||
| Ratio of expenses before fee waiver (%) |
0.25 | 0.25 | 0.25 | * | ||||||||
| Ratio of expenses after fee waiver (%) |
0.20 | 0.24 | 0.25 | * | ||||||||
| Ratio of net investment income (loss) (%) |
4.09 | (c) | 4.66 | 4.44 | * | |||||||
| Portfolio turnover rate (%)(e) |
111 | 55 | 52 | ** | ||||||||
| (a) | For the period January 11, 2018 (commencement of operations) through August 31, 2018. |
| (b) | Based on average shares outstanding during the period. |
| (c) | The Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2017-08 to amend the amortization period to the earliest call date for purchased callable debt securities held at a premium. Effective September 1, 2019, the Fund adopted ASU 2017-08 and the effect of this change for the year ended August 31, 2020 was a decrease to net investment income per share by $0.04 and $0.23, increase to net realized and unrealized gain (loss) from investments per share by $0.04 and $0.23, and decrease to the ratio of net investment income to average net assets of 0.08% and 0.47%, for Xtrackers High Beta High Yield Bond ETF and Xtrackers Low Beta High Yield Bond ETF respectively. Per share data and ratios for years prior to August 31, 2020 have not been restated to reflect this change in presentation. |
| (d) | Total Return would have been lower if certain expenses had not been reimbursed by the Advisor. |
| (e) | Portfolio turnover rate does not include securities received or delivered from processing creations or redemptions. |
| * | Annualized. |
| ** | Not Annualized. |
| See Notes to Financial Statements. | 63 |
DBX ETF Trust
Financial Highlights (Continued)
| Xtrackers Short Duration High Yield Bond ETF Selected Per Share Data |
Years Ended August 31, | Period Ended 8/31/2018(a) |
||||||||||
| 2020 | 2019 | |||||||||||
| Net Asset Value, beginning of period |
$ | 49.13 | $ | 49.69 | $ | 50.00 | ||||||
|
|
|
|
|
|
|
|||||||
| Income (loss) from investment operations: | ||||||||||||
| Net investment income (loss)(b) |
2.69 | (c) | 2.83 | 1.76 | ||||||||
| Net realized and unrealized gain (loss) |
(2.47 | )(c)(d) | (0.54 | ) | (0.59 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Total from investment operations |
0.22 | 2.29 | 1.17 | |||||||||
|
|
|
|
|
|
|
|||||||
| Less distributions from: |
| |||||||||||
| Net investment income |
(2.78 | ) | (2.85 | ) | (1.48 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Total distributions |
(2.78 | ) | (2.85 | ) | (1.48 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Net Asset Value, end of period |
$ | 46.57 | $ | 49.13 | $ | 49.69 | ||||||
|
|
|
|
|
|
|
|||||||
| Total Return (%) |
0.61 | (e) | 4.79 | (e) | 2.41 | ** | ||||||
| Ratios to Average Net Assets and Supplemental Data |
||||||||||||
| Net Assets, end of period ($ millions) |
37 | 22 | 40 | |||||||||
| Ratio of expenses before fee waiver (%) |
0.20 | 0.20 | 0.20 | * | ||||||||
| Ratio of expenses after fee waiver (%) |
0.20 | 0.20 | 0.20 | * | ||||||||
| Ratio of net investment income (loss) (%) |
6.13 | (c) | 5.78 | 5.56 | * | |||||||
| Portfolio turnover rate (%)(f) |
150 | 45 | 37 | ** | ||||||||
| Xtrackers USD High Yield Corporate Bond ETF Selected Per Share Data |
Years Ended August 31, | Period Ended 8/31/2017(g) |
||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||
| Net Asset Value, beginning of period |
$ | 50.24 | $ | 49.88 | $ | 51.21 | $ | 50.00 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) from investment operations: | ||||||||||||||||
| Net investment income (loss)(b) |
2.54 | (c) | 2.98 | 2.89 | 2.07 | |||||||||||
| Net realized and unrealized gain (loss) |
(1.19 | )(c) | 0.30 | (1.53 | ) | 1.11 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total from investment operations |
1.35 | 3.28 | 1.36 | 3.18 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Less distributions from: |
| |||||||||||||||
| Net investment income |
(2.76 | ) | (2.92 | ) | (2.69 | ) | (1.97 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total distributions |
(2.76 | ) | (2.92 | ) | (2.69 | ) | (1.97 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Asset Value, end of period |
$ | 48.83 | $ | 50.24 | $ | 49.88 | $ | 51.21 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Return (%) |
2.91 | (e) | 6.87 | (e) | 2.76 | (e) | 6.43 | ** | ||||||||
| Ratios to Average Net Assets and Supplemental Data |
||||||||||||||||
| Net Assets, end of period ($ millions) |
6,209 | 3,062 | 1,796 | 220 | ||||||||||||
| Ratio of expenses before fee waiver (%) |
0.20 | 0.20 | 0.20 | 0.25 | * | |||||||||||
| Ratio of expenses after fee waiver (%) |
0.15 | 0.17 | 0.20 | 0.25 | * | |||||||||||
| Ratio of net investment income (loss) (%) |
5.27 | (c) | 6.06 | 5.86 | 5.57 | * | ||||||||||
| Portfolio turnover rate (%)(f) |
54 | 29 | 32 | 36 | ** | |||||||||||
| (a) | For the period January 10, 2018 (commencement of operations) through August 31, 2018. |
| (b) | Based on average shares outstanding during the period. |
| (c) | The Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2017-08 to amend the amortization period to the earliest call date for purchased callable debt securities held at a premium. Effective September 1, 2019, the Fund adopted ASU 2017-08 and the effect of this change for the year ended August 31, 2020 was a decrease to net investment income per share by $0.10 and $0.15, increase to net realized and unrealized gain (loss) from investments per share by $0.10 and $0.15, and decrease to the ratio of net investment income to average net assets of 0.22% and 0.32%, for Xtrackers Short Duration High Yield Bond ETF and Xtrackers USD High Yield Corporate Bond ETF respectively. Per share data and ratios for years prior to August 31, 2020 have not been restated to reflect this change in presentation. |
| (d) | Because of the timing of subscriptions and redemptions in relation to fluctuating markets at value, the amount shown may not agree with the change in aggregate gains and losses. |
| (e) | Total Return would have been lower if certain expenses had not been reimbursed by the Advisor. |
| (f) | Portfolio turnover rate does not include securities received or delivered from processing creations or redemptions. |
| (g) | For the period December 7, 2016 (commencement of operations) through August 31, 2017. |
| * | Annualized. |
| ** | Not Annualized. |
| See Notes to Financial Statements. | 64 |
DBX ETF Trust
1. Organization
DBX ETF Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end registered management investment company organized as a Delaware statutory trust.
As of August 31, 2020, the Trust consists of thirty-three investment series of exchange-traded funds (“ETFs”) (each a “Fund” and collectively, the “Funds”) in operation and trading. These financial statements report on the Funds listed below:
| Xtrackers High Beta High Yield Bond ETF |
| Xtrackers Low Beta High Yield Bond ETF |
| Xtrackers Short Duration High Yield Bond ETF |
| Xtrackers USD High Yield Corporate Bond ETF |
DBX Advisors LLC (“DBX” or the “Advisor”), an indirect, wholly-owned subsidiary of DWS Group GmbH & Co. KGaA (“DWS Group”), serves as investment advisor to the Funds and has overall responsibility for the general management and administration of the Funds, subject to the supervision of the Funds’ Board of Trustees (“Board”).
Each Fund offers shares that are listed and traded on the NYSE Arca, Inc. (“NYSE Arca”). Unlike conventional mutual funds, each Fund issues and redeems shares on a continuous basis, at net asset value (“NAV”), only in large specified lots consisting of 50,000 shares, each called a “Creation Unit”, to authorized participants who have entered into agreements with the Funds’ distributor. Shares are not individually redeemable securities of the Funds, and owners of the shares may acquire those shares from the Funds, or tender such shares for redemption to the Funds, in Creation Units only.
The investment objective of each Fund is to track the performance, before fees and expenses, of a particular index (the “Underlying Index”). The underlying indices for the Funds are:
| Fund |
Underlying Index | |
| Xtrackers High Beta High Yield Bond ETF | Solactive USD High Yield Corporates Total Market High Beta Index | |
| Xtrackers Low Beta High Yield Bond ETF | Solactive USD High Yield Corporates Total Market Low Beta Index | |
| Xtrackers Short Duration High Yield Bond ETF | Solactive USD High Yield Corporates Total Market 0-5 Year Index | |
| Xtrackers USD High Yield Corporate Bond ETF | Solactive USD High Yield Corporates Total Market Index |
The Solactive USD High Yield Corporates Total Market High Beta Index is designed to track the performance of the segment of the U.S. dollar denominated high yield corporate bond market that exhibits higher overall beta to the broader high yield corporate fixed income market. The Solactive USD High Yield Corporates Total Market Low Beta Index is designed to track the performance of the segment of the U.S. dollar-denominated high yield corporate bond market that exhibits lower overall beta to the broader high yield corporate fixed income market. The Solactive USD High Yield Corporates Total Market 0-5 Year Index is designed to track the performance of short-term publicly issued U.S. dollar-denominated below investment grade corporate debt. The Solactive USD High Yield Corporates Total Market Index is designed to track the performance of a basket of U.S. dollar-denominated high yield liquid corporate bonds. Under normal circumstances, the Solactive Indexes are reconstituted monthly on the last day of each month. The Funds reconstitute and rebalance their portfolios in accordance with their respective underlying indexes, and therefore any changes to the underlying indexes reconstitution and rebalance schedules will result in corresponding changes to a Fund’s reconstitution and rebalance schedule.
Each Fund is entitled to use its respective Underlying Index pursuant to a licensing agreement between the Index Provider and DBX. There is no charge to the Funds in connection with these licensing agreements.
Each Fund, except Xtrackers USD High Yield Corporate Bond ETF, is non-diversified and is not limited by the Act with regard to the percentage of its assets that may be invested in the securities of a single issuer. This means the securities of a particular issuer (or securities of issuers in particular industries) may dominate the Underlying Index of the Fund and, consequently, the Fund’s investment portfolio. This may adversely affect the Fund’s performance or subject the Fund’s shares to greater price volatility than that experienced by more diversified investment companies.
65
DBX ETF Trust
Notes to Financial Statements (Continued)
Pursuant to the Trust’s organizational documents, the Trust’s officers and trustees are indemnified against certain liabilities that may arise out of the performance of their duties to the Funds. Additionally, in the normal course of business the Trust enters into contracts that contain a variety of representations that provide indemnification for certain liabilities. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Trust expects the risk of loss to be remote.
2. Significant Accounting Policies
The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which require management to make certain estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. Each Fund qualifies as an investment company under Topic 946 of the Accounting Standards Codification of U.S. GAAP. The following is a summary of significant accounting policies followed by the Funds.
Security Valuation The NAV of each Fund’s shares is calculated each business day as of the close of regular trading on the New York Stock Exchange, generally 4:00 p.m. Eastern Time. NAV per share is calculated by dividing a Fund’s net assets by the number of Fund shares outstanding.
Various inputs are used in determining the value of the Funds’ investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.
Corporate and sovereign debt securities are valued at prices supplied by independent pricing services approved by the Funds’ Board. Such services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. If the pricing services are unable to provide valuations, securities are valued at the mean between the bid and ask quotations or evaluated prices, as applicable, obtained from broker dealers. These securities are generally categorized as Level 2.
ETFs are valued at the most recent sale price or official closing price reported on the exchange (U.S. or foreign) or over-the-counter market on which they trade. ETFs for which no sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation. ETFs are generally categorized as Level 1.
Investments in open-end investment companies are valued at their NAV each business day and are categorized as Level 1.
Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Board and are generally categorized as Level 3. In accordance with the Funds’ valuation procedures, factors considered in determining value may include, but are not limited to, the type of the security; the size of the holding; the initial cost of the security; the existence of any contractual restrictions on the security’s disposition; the price and extent of public trading in similar securities of the issuer or of comparable companies; quotations or evaluated prices from broker-dealers and/or pricing services; information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities); an analysis of the company’s or issuer’s financial statements; an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold; length of time of a halt in trading of the security; movement in the security’s proxy index; and with respect to debt securities, the maturity, coupon, creditworthiness, currency denomination and the movement of the market in which the security is normally traded. The value determined under these procedures may differ from published values for the same securities.
Fair value pricing could result in a difference between the prices used to calculate a Fund’s NAV and the prices used by the Fund’s Underlying Index, which in turn could result in a difference between the Fund’s performance and the performance of the Fund’s Underlying Index.
66
DBX ETF Trust
Notes to Financial Statements (Continued)
Disclosure about the classification of the fair value measurements is included in a table following the Fund’s Schedule of Investments.
Cash Cash consists of cash held at banks and is on deposit with major financial institutions.
Investment Transactions and Investment Income Investment transactions are recorded as of the date that the securities are purchased or sold (trade date). Realized gains and losses from the sale or disposition of securities are calculated on the identified cost-method. Interest income is recorded on the accrual basis. All premiums and discounts are amortized/accreted for both tax and financial reporting purposes.
Accounting Standards Update In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update 2017-08, Receivables-Nonrefundable fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities which amends the amortization period for certain purchased callable debt securities. Under the new guidance, premium amortization of purchased callable debt securities that have explicit, non-contingent call features and are callable at fixed prices will be amortized to the earliest call date. Effective September 1, 2019 the Funds adopted ASU 2017-08 on a modified retrospective basis through a cumulative-effect adjustment as of the beginning of the period of adoption. The adoption of ASU 2017-08 had no impact on beginning net assets or any prior period information presented in the financial statements. Refer to the Financial Highlights for any current period impacts to the Funds.
Tax Information and Dividends and Distributions to Shareholders It is each Fund’s policy to comply with all requirements of the Internal Revenue Code of 1986, as amended (“the Code”). Each Fund intends to qualify for and to elect treatment as a separate Regulated Investment Company (“RIC”) under Subchapter M of the Code. It is the policy of each Fund to pay out dividends from its net investment income, if any, to investors monthly. Taxable net realized gains from investment transactions, reduced by capital loss carryforwards, if any, are declared and distributed to shareholders at least annually. The capital loss carryforward amount, if any, is available to offset future net capital gains. The Funds may occasionally be required to make supplemental distributions at some other time during the year. The Funds reserve the right to declare special distributions if, in their reasonable discretion, such action is necessary or advisable to preserve the status of each Fund as a RIC or to avoid imposition of income or excise taxes on undistributed income. Dividends and distributions to shareholders, if any, are recorded on the ex-dividend date. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with Federal income tax regulations which may differ from U.S. GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified at the end of the year within the components of net assets based on their federal tax treatment; temporary differences do not require reclassification. Dividends and distributions, which exceed earnings and profits for the full year for tax purposes, are reported as a tax return of capital.
In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Funds’ tax positions taken or expected to be taken on foreign, federal and state income tax returns for all open tax years and has concluded that no provision for income tax is required in the Funds’ financial statements.
The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense on the Statements of Operations. For the year ended August 31, 2020, the Funds did not incur any interest or penalties.
As of August 31, 2020, the components of accumulated earnings (losses) on a tax basis were as follows:
| Undistributed Ordinary Income |
Capital and Other Gains (Losses) |
Unrealized Appreciation (Depreciation) |
Total Accumulated Earnings (Losses) |
|||||||||||||
| Xtrackers High Beta High Yield Bond ETF |
$ | 222,129 | $ | (10,799,562 | ) | $ | (12,157 | ) | $ | (10,589,590 | ) | |||||
| Xtrackers Low Beta High Yield Bond ETF |
303,086 | (4,532,620 | ) | 772,850 | (3,456,684 | ) | ||||||||||
| Xtrackers Short Duration High Yield Bond ETF |
288,342 | (1,351,620 | ) | 1,494,843 | 431,565 | |||||||||||
| Xtrackers USD High Yield Corporate Bond ETF |
23,763,895 | (93,209,076 | ) | 16,228,962 | (53,216,219 | ) | ||||||||||
67
DBX ETF Trust
Notes to Financial Statements (Continued)
The tax character of dividends and distributions declared for the years ended August 31, 2020 and August 31, 2019 were as follows:
| Year Ended August 31, 2020 | ||||
| Ordinary Income* | ||||
| Xtrackers High Beta High Yield Bond ETF |
$ | 9,663,912 | ||
| Xtrackers Low Beta High Yield Bond ETF |
7,126,652 | |||
| Xtrackers Short Duration High Yield Bond ETF |
2,545,587 | |||
| Xtrackers USD High Yield Corporate Bond ETF |
231,469,345 | |||
| Year Ended August 31, 2019 | ||||
| Ordinary Income* | ||||
| Xtrackers High Beta High Yield Bond ETF |
$ | 10,069,325 | ||
| Xtrackers Low Beta High Yield Bond ETF |
6,517,014 | |||
| Xtrackers Short Duration High Yield Bond ETF |
2,014,987 | |||
| Xtrackers USD High Yield Corporate Bond ETF |
141,405,511 | |||
| * | For tax purposes short-term capital gain distributions are considered ordinary income distributions. |
At August 31, 2020, for Federal income tax purposes, the Funds have capital loss carryforwards available as shown in the table below, to the extent provided by regulations, to offset future capital gains for an unlimited period. To the extent that these loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to shareholders.
| Short-Term | Long-Term | Total Amount | ||||||||||
| Xtrackers High Beta High Yield Bond ETF |
$ | 2,922,464 | $ | 7,877,098 | $ | 10,799,562 | ||||||
| Xtrackers Low Beta High Yield Bond ETF |
3,515,042 | 1,017,578 | 4,532,620 | |||||||||
| Xtrackers Short Duration High Yield Bond ETF |
629,788 | 721,832 | 1,351,620 | |||||||||
| Xtrackers USD High Yield Corporate Bond ETF |
37,668,804 | 55,540,272 | 93,209,076 | |||||||||
For the fiscal year ended August 31, 2020, the effect of permanent “book/tax” reclassifications to the components of net assets are included below.These differences are primarily due to premium amortization on debt securities, redemptions-in-kind.
| Distributable earnings (loss) |
Paid-In Capital |
|||||||
| Xtrackers High Beta High Yield Bond ETF |
$ | 316,483 | $ | (316,483 | ) | |||
| Xtrackers Low Beta High Yield Bond ETF |
(6,233,682 | ) | 6,233,682 | |||||
| Xtrackers Short Duration High Yield Bond ETF |
(1,822,510 | ) | 1,822,510 | |||||
| Xtrackers USD High Yield Corporate Bond ETF |
1,350,723 | (1,350,723 | ) | |||||
As of August 31, 2020, the aggregate cost of investments for federal income tax purposes, the net unrealized appreciation or (depreciation) and the aggregated gross unrealized appreciation (depreciation) on investments were as follows:
| Aggregate Tax Cost |
Net Unrealized Appreciation (Depreciation) |
Aggregate Gross Unrealized Appreciation |
Aggregate Gross Unrealized (Depreciation) |
|||||||||||||
| Xtrackers High Beta High Yield Bond ETF |
$ | 7,364,887 | $ | (12,157 | ) | $ | 259,804 | $ | (271,961 | ) | ||||||
| Xtrackers Low Beta High Yield Bond ETF |
38,358,013 | 772,850 | 855,430 | (82,580 | ) | |||||||||||
| Xtrackers Short Duration High Yield Bond ETF |
38,030,279 | 1,494,843 | 1,731,280 | (236,437 | ) | |||||||||||
| Xtrackers USD High Yield Corporate Bond ETF |
6,332,695,272 | 16,228,962 | 104,583,711 | (88,354,749 | ) | |||||||||||
Foreign Taxes The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, capital gains on investments, certain foreign currency transactions or other corporate events. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and are reflected in their Statements of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, and foreign
68
DBX ETF Trust
Notes to Financial Statements (Continued)
taxes on capital gains from sales of investments and foreign currency transactions are included in their respective net realized gain (loss) categories. Receivables and payables related to foreign taxes as of August 31, 2020, if any, are disclosed in the Funds’ Statements of Assets and Liabilities.
Foreign Currency Translations The books and records of the Funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing exchange rates at period end. Purchases and sales of investment securities, income and expenses are translated into U.S. dollars at the prevailing exchange rates on the respective dates of the transactions.
Net realized and unrealized gains and losses on foreign currency transactions represent net gains and losses between trade and settlement dates on securities transactions, the acquisition and disposition of foreign currencies, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. The portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed, but is included with net realized and unrealized gain/appreciation and loss/depreciation on investments.
Securities Lending The Funds may lend securities to certain financial institutions under the terms of their securities lending agreement. During the term of the loans the Funds continue to receive interest and dividends generated by the securities and to participate in any changes in their market value. The Funds require the borrowers of the securities to maintain collateral with the Funds consisting of cash and/or securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities having a value at least equal to the value of the securities loaned. When the collateral falls below specified amounts, the lending agent will use its best effort to obtain additional collateral on the next business day to meet required amounts under the securities lending agreement. During the year ended August 31, 2020, the Funds invested the cash collateral into a joint trading account in DWS Government & Agency Securities Portfolio, an affiliated money market fund managed by DWS Investment Management Americas, Inc. DWS Investment Management Americas, Inc. receives a management/administration fee (0.06% annualized effective rate as of August 31, 2020) on the cash collateral invested in DWS Government & Agency Securities Portfolio. The Funds receive compensation for lending their securities either in the form of fees or by earning interest on invested cash collateral, net of borrower rebates and fees paid to a lending agent. Either the Fund or the borrower may terminate the loan at any time and the borrower, after notice, is required to return borrowed securities within a standard time period. There may be risks of delay and costs in recovery of securities or even loss of rights in the collateral should the borrower of the securities fail financially. If the Funds are not able to recover securities lent, the Funds may sell the collateral and purchase a replacement investment in the market, incurring the risk that the value of the replacement security is greater than the value of the collateral. The Funds are also subject to all investment risks associated with the reinvestment of any cash collateral received, including, but not limited to, interest rate, credit and liquidity risk associated with such investments.
69
DBX ETF Trust
Notes to Financial Statements (Continued)
As of August 31, 2020, the Funds listed below had securities on loan. The value of the related collateral exceeded the value of the securities loaned at year end.
| Remaining Contractual Maturity of the Agreements, as of August 31, 2020 |
||||||||||||||||||||
| Securities Lending Transactions | Overnight and Continuous |
<30 Days | Between 30 & 90 days |
>90 days | Total | |||||||||||||||
| Xtrackers High Beta High Yield Bond ETF |
| |||||||||||||||||||
| Corporate Bonds |
$ | 168,578 | $ | — | $ | 1,560 | $ | 103,270 | $ | 273,408 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions |
|
$ | 273,408 | |||||||||||||||||
| Xtrackers Low Beta High Yield Bond ETF |
| |||||||||||||||||||
| Corporate Bonds |
$ | 612,989 | $ | — | $ | 1,645 | $ | 108,845 | $ | 723,479 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions |
|
$ | 723,479 | |||||||||||||||||
| Xtrackers Short Duration High Yield Bond ETF |
| |||||||||||||||||||
| Corporate Bonds |
$ | 1,815,630 | $ | — | $ | 3,271 | $ | 216,442 | $ | 2,035,343 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions |
|
$ | 2,035,343 | |||||||||||||||||
| Xtrackers USD High Yield Corporate Bond ETF |
| |||||||||||||||||||
| Corporate Bonds |
$ | 134,912,900 | $ | — | $ | 204,915 | $ | 13,246,366 | $ | 148,364,181 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross amount of recognized liabilities and non-cash collateral for securities lending transactions |
|
$ | 148,364,181 | |||||||||||||||||
Affiliated Cash Management Vehicles The Funds may invest uninvested cash balances in DWS Government Money Market Series and DWS ESG Liquidity Fund, affiliated money market funds which are managed by DWS Investment Management Americas, Inc. (“DIMA”), also an indirect, wholly owned subsidiary of DWS Group GmbH & Co. KGaA. Each affiliated money market fund is managed in accordance with Rule 2a-7 under the 1940 Act, which governs the quality, maturity, diversity and liquidity of instruments in which a money market fund may invest. DWS Government Money Market Series seeks to maintain a stable NAV, and DWS ESG Liquidity Fund maintains a floating NAV. The Funds indirectly bear their proportionate share of the expenses of each affiliated money market fund in which they invest. The Advisor will waive an amount of the unitary advisory fee payable to the Advisor by the Funds equal to such acquired fund’s fees and expenses on the Funds’ assets invested in the affiliated money market funds.
3. Investment Advisory and Other Agreements
The Advisor has overall responsibility for the general management and administration of the Funds, subject to the supervision of the Funds’ Board of Trustees. Under an investment advisory agreement between the Trust, on behalf of the Funds, and the Advisor (the “Investment Advisory Agreement”), the Advisor is responsible for arranging sub-advisory, transfer agency, custody, fund administration, and all other non-distribution related services for the Funds to operate.
For its investment advisory services to the Funds below, the Advisor was entitled to receive a unitary advisory fee based on each Fund’s average daily net assets, computed and accrued daily and payable monthly, at an annual rate equal to:
| Unitary Advisory Fee |
||||
| Xtrackers High Beta High Yield Bond ETF |
0.35 | % | ||
| Xtrackers Low Beta High Yield Bond ETF |
0.25 | % | ||
| Xtrackers Short Duration High Yield Bond ETF |
0.20 | % | ||
| Xtrackers USD High Yield Corporate Bond ETF |
0.20 | % | ||
70
DBX ETF Trust
Notes to Financial Statements (Continued)
The Advisor for Xtrackers High Beta High Yield Bond ETF has contractually agreed, until December 19, 2020, to waive a portion of its unitary advisory fee to the extent necessary to prevent the operating expenses of the Fund from exceeding 0.20% of the Fund’s average daily net assets. For the year ended August 31, 2020, the Advisor waived $203,878 of expenses to the Fund.
The Advisor for Xtrackers Low Beta High Yield Bond ETF has contractually agreed, until December 19, 2020, to waive a portion of its unitary advisory fee to the extent necessary to prevent the operating expenses of the Fund from exceeding 0.20% of the Fund’s average daily net assets. For the year ended August 31, 2020, the Advisor waived $75,166 of expenses to the Fund.
The Advisor for Xtrackers USD High Yield Corporate Bond ETF has contractually agreed, until December 19, 2020, to waive a portion of its unitary advisory fee to the extent necessary to prevent the operating expenses of the Fund from exceeding 0.15% of the Fund’s average daily net assets. For the year ended August 31, 2020, the Advisor waived $2,136,730 of expenses to the Fund.
The Advisor for the Funds below has contractually agreed to waive a portion of its unitary advisory fees in an amount equal to the acquired fund’s fees and expenses attributable to the Funds’ investments in affiliated Funds. For the year ended August 31, 2020, the Advisor waived expenses of the Funds as follows:
| Expenses Waived |
||||
| Xtrackers High Beta High Yield Bond ETF |
$ | 805 | ||
| Xtrackers Low Beta High Yield Bond ETF |
1,094 | |||
| Xtrackers Short Duration High Yield Bond ETF |
566 | |||
| Xtrackers USD High Yield Corporate Bond ETF |
20,899 | |||
Out of the unitary advisory fee, the Advisor pays substantially all expenses of each Fund, including the cost of transfer agency, custody, fund administration, legal, audit and other services, and expenses of the Independent Trustees. Each Fund is responsible for the payment of interest expense, acquired fund fees and expenses, taxes, brokerage expenses, distribution fees or expenses, if any, litigation expenses and extraordinary expenses.
The Bank of New York Mellon, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as Administrator, Custodian, Accounting Agent, Lending Agent and Transfer Agent for each Fund.
ALPS Distributors, Inc. (the “Distributor”) serves as the distributor of Creation Units for each Fund on an agency basis. The Distributor does not maintain a secondary market in shares of the Funds.
The Board of Trustees is currently comprised of three Independent Trustees. The Advisor paid retainer fees and attendance fees to each Independent Trustee; retainer fees to the Chairman of the Board of Trustees and the Chairman of the Audit Committee; and attendance fees to each member of the Audit Committee (which is comprised of all of the Funds’ Independent Trustees).
4. Investment Portfolio Transactions
For the year ended August 31, 2020, the cost of investments purchased and proceeds from sale of investments (excluding in-kind transactions and short-term investments) were as follows:
| Purchases | Sales | |||||||
| Xtrackers High Beta High Yield Bond ETF |
$ | 128,134,911 | $ | 128,614,080 | ||||
| Xtrackers Low Beta High Yield Bond ETF |
161,431,737 | 159,672,697 | ||||||
| Xtrackers Short Duration High Yield Bond ETF |
59,004,305 | 55,827,282 | ||||||
| Xtrackers USD High Yield Corporate Bond ETF |
2,218,868,785 | 2,318,498,779 | ||||||
For the year ended August 31, 2020, the cost of in-kind purchases and proceeds from in-kind sales were as follows:
| Purchases | Sales | |||||||
| Xtrackers High Beta High Yield Bond ETF |
$ | — | $ | 133,432,427 | ||||
| Xtrackers Low Beta High Yield Bond ETF |
51,085,501 | 159,050,478 | ||||||
| Xtrackers Short Duration High Yield Bond ETF |
167,406,391 | 159,531,285 | ||||||
| Xtrackers USD High Yield Corporate Bond ETF |
8,060,569,242 | 4,798,759,518 | ||||||
71
DBX ETF Trust
Notes to Financial Statements (Continued)
Transactions with Affiliates. The Funds may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is solely due to having a common investment advisor, common officers, or common trustees. During the year ended August 31, 2020, the Funds engaged in securities purchases and securities sales with an affiliated fund in compliance with Rule 17a-7 under the 1940 Act as follows:
| Securities Purchased | Securities Sold | Net Realized Gain (Loss) on Securities Sold |
||||||||||
| Xtrackers High Beta High Yield Bond ETF |
$ | 49,860,555 | $ | 81,592,310 | $ | 2,070,349 | ||||||
| Xtrackers Low Beta High Yield Bond ETF |
81,810,285 | 50,042,319 | (2,479,756 | ) | ||||||||
| Xtrackers Short Duration High Yield Bond ETF |
116,869 | 176,012 | (21,571 | ) | ||||||||
| Xtrackers USD High Yield Corporate Bond ETF |
318,264 | 295,331 | (22,388 | ) | ||||||||
5. Fund Share Transactions
As of August 31, 2020, there were unlimited Fund shares, no par value, authorized by the Trust. Fund shares are issued and redeemed by each Fund only in Creation Units or multiples thereof. Except when aggregated in Creation Units, shares of each Fund are not redeemable. Transactions in capital shares for each Fund are disclosed in detail in the Statements of Changes in Net Assets. The consideration for the purchase of Creation Units of a Fund generally consists of the in-kind contribution of a designated portfolio of securities constituting a portfolio sampling representation of the securities included in the respective Fund’s Underlying Index and an amount of cash, which under certain circumstances may include cash in lieu of portfolio securities. Investors purchasing and redeeming Creation Units pay a purchase transaction fee and a redemption transaction fee to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units.
6. Investing in High-Yield Debt Securities
High-yield debt securities or junk bonds are generally regarded as speculative with respect to the issuer’s continuing ability to meet principal and interest payments. A Fund’s performance could be hurt if an issuer of a debt security suffers an adverse change in financial condition that results in the issuer not making timely payments of interest or principal, a security downgrade or an inability to meet a financial obligation. High-yield debt securities’ total return and yield may generally be expected to fluctuate more than the total return and yield of investment-grade debt securities. A real or perceived economic downturn or an increase in market interest rates could cause a decline in the value of high-yield debt securities, result in increased redemptions and/or result in increased portfolio turnover, which could result in a decline in NAV of a Fund, reduce liquidity for certain investments and/or increase costs. High-yield debt securities are often thinly traded and can be more difficult to sell and value accurately than investment-grade debt securities as there may be no established secondary market. Investments in high-yield debt securities could increase liquidity risk for a Fund. In addition, the market for high-yield debt securities can experience sudden and sharp volatility which is generally associated more with investments in stocks.
7. Line of Credit
The Trust has entered into a senior unsecured credit facility with a syndication of banks which allows the Xtrackers USD High Yield Corporate Bond ETF and certain other funds managed by the Advisor to borrow up to $105 million. The Fund may borrow money under this credit facility to the extent necessary for temporary or emergency purposes, including the funding of shareholder redemption requests, trade settlements, and as necessary to distribute to shareholders any income necessary to maintain the Fund’s status as a regulated investment company. Borrowings are charged an interest rate of 1.25% per annum plus the greater of the Federal Funds Effective Rate or the one-month LIBOR Rate. The Fund may borrow up to the lesser of 33 percent of its net assets as permitted by the Act or 25 percent of adjusted total net assets. The Fund had no outstanding loans at August 31, 2020.
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Notes to Financial Statements (Continued)
8. Payments by Affiliates
During the year ended August 31, 2020, the Advisor agreed to reimburse Xtrackers High Beta High Yield Bond ETF $2,007 for a loss due to a trade executed incorrectly. The amount compensated was less than 0.01% of the Fund’s average net assets, thus having no impact on the Fund’s total return.
During the year ended August 31, 2020, the Advisor agreed to reimburse Xtrackers Low Beta High Yield Bond ETF $3,430 for a loss due to a trade executed incorrectly. The amount compensated was less than 0.01% of the Fund’s average net assets, thus having no impact on the Fund’s total return.
During the year ended August 31, 2020, the Advisor agreed to reimburse Xtrackers Short Duration High Yield Bond ETF $3,835 for a loss due to a trade executed incorrectly. The amount compensated was 0.01% of the Fund’s average net assets.
During the year ended August 31, 2020, the Advisor agreed to reimburse Xtrackers USD High Yield Corporate Bond ETF $5,943 for a loss due to a trade executed incorrectly. The amount compensated was less than 0.01% of the Fund’s average net assets, thus having no impact on the Fund’s total return.
9. Other — COVID-19 Pandemic
A novel strain of coronavirus (COVID-19) outbreak was declared a pandemic by the World Health Organization on March 11, 2020. The situation is evolving with various cities and countries around the world responding in different ways to address the pandemic. There are direct and indirect economic effects developing for various industries and individual companies throughout the world. The recent pandemic spread of the novel coronavirus and related geopolitical events could lead to increased financial market volatility, disruption to U.S. and world economies and markets and may have significant adverse effects on a Fund and its investments. A prolonged disruption may result in a Fund and its service providers experiencing operational difficulties in implementing their business continuity plans. Management will continue to monitor the impact COVID-19 has on the Funds and reflect the consequences as appropriate in each Fund’s accounting and financial reporting.
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DBX ETF Trust
To the Shareholders of
Xtrackers High Beta High Yield Bond ETF, Xtrackers Low Beta High Yield Bond ETF, Xtrackers Short Duration High Yield Bond ETF, Xtrackers USD High Yield Corporate Bond ETF, and the Board of Trustees of DBX ETF Trust:
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of Xtrackers High Beta High Yield Bond ETF, Xtrackers Low Beta High Yield Bond ETF, Xtrackers Short Duration High Yield Bond ETF, and Xtrackers USD High Yield Corporate Bond ETF (collectively referred to as the “Funds”), (four of the funds constituting DBX ETF Trust (the “Trust”)), including the schedules of investments, as of August 31, 2020, and the related statements of operations and changes in net assets, and the financial highlights for each of the periods indicated in the table below and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds (four of the funds constituting DBX ETF Trust) at August 31, 2020, and the results of their operations, changes in net assets and financial highlights for each of the periods indicated in the table below, in conformity with U.S. generally accepted accounting principles.
|
Individual fund constituting the DBX ETF Trust |
Statement of operations | Statements of changes in net assets | Financial highlights | |||
| Xtrackers High Beta High Yield Bond ETF
Xtrackers Low Beta High Yield Bond ETF |
For the year ended August 31, 2020 | For each of the two years in the period ended August 31, 2020 | For each of the two years in the period ended August 31, 2020 and the period from January 11, 2018 (commencement of operations) through August 31, 2018 | |||
| Xtrackers Short Duration High Yield Bond ETF | For the year ended August 31, 2020 | For each of the two years in the period ended August 31, 2020 | For each of the two years in the period ended August 31, 2020 and the period from January 10, 2018 (commencement of operations) through August 31, 2018 | |||
| Xtrackers USD High Yield Corporate Bond ETF | For the year ended August 31, 2020 | For each of the two years in the period ended August 31, 2020 | For each of the three years in the period ended August 31, 2020 and the period from December 7, 2016 (commencement of operations) through August 31, 2017 |
Basis for Opinion
These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on each of the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits we are required to obtain an
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DBX ETF Trust
Report of Independent Registered Public Accounting Firm (Continued)
understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 2020, by correspondence with the custodians and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more investment companies in the DWS family of funds since at least 1979, but we are unable to determine the specific year.
New York, New York
October 26, 2020
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DBX ETF Trust
Identification and Background
The Board has responsibility for the overall management and operations of the funds, including general supervision of the duties performed by the Advisor and other service providers. Each Board Member serves until his or her successor is duly elected or appointed and qualified. Each officer serves until he or she resigns, is removed, dies, retires or becomes disqualified.
The Trust currently has three Board Members. The three Independent Board Members have no affiliation or business connection with the Advisor or any of its affiliated persons and do not own any stock or other securities issued by the Advisor.
The Independent Board Members of the Trust, their term of office and length of time served, their principal business occupations during the past five years, the number of portfolios in the fund complex (defined below) overseen by each Independent Board Member, and other directorships, if any, held by the Board Members are shown below. The fund complex includes all registered open- and closed-end funds (including all of their portfolios) advised by the Advisor and any registered funds that have an investment advisor that is an affiliated person of the Advisor. As of the date of this shareholder report, the fund complex consists of the funds in the Trust, as well as the registered funds advised by affiliates of the Advisor.
Shareholder Communications to the Board. Shareholders may send communications to the Trust’s Board by addressing the communications directly to the Board (or individual Board Members) and/or otherwise clearly indicating in the salutation that the communication is for the Board (or individual Board Members). The shareholder may send the communication to either the Trust’s office or directly to such Board members c/o 875 Third Avenue, New York, NY 10022. Other shareholder communications received by the Trust not directly addressed and sent to the Board will be reviewed and generally responded to by management. Such communications will be forwarded to the Board at management’s discretion based on the matters contained therein.
| Independent Board Members | ||||||
| Name, Year of Birth, Position with the Trust and Length of Time Served(1) |
Business Experience and Directorships During the Past 5 Years |
Number of Portfolios in Fund Complex Overseen |
Other Directorships Held by Board Member | |||
| Stephen R. Byers (1953) Chairman since 2016, and Board Member since 2011 (formerly, Lead Independent Board Member, 2015-2016) |
Independent Director (2011- present); Independent Consultant (2014-present); Director of Investment Management, the Dreyfus Corporation (2000-2006) and Vice Chairman and Chief Investment Officer, the Dreyfus Corporation (2002-2006). | 33 | The Arbitrage Funds, Sierra Income Corporation, Mutual Fund Directors Forum | |||
| George O. Elston (1964) Board Member since 2011, Chairman of the Audit Committee since 2015 |
Chief Financial Officer, Enzyvant (2018-present); Chief Executive Officer, 2X Oncology, Inc. (2017-2018); Senior Vice President and Chief Financial Officer, Juniper Pharmaceuticals, Inc. (2014-2016); Senior Vice President and Chief Financial Officer, KBI BioPharma Inc. (2013-2014); Managing Partner, Chatham Street Partners (2010-2013). | 33 | — | |||
| J. David Officer (1948) Board Member since 2011, Chairman of the Nominating Committee since 2015 |
Independent Director (2010-present); Vice Chairman, the Dreyfus Corporation (2006-2009); President, The Dreyfus Family of Funds, Inc. (2006-2009). | 33 | (Chairman of) Ilex Management Ltd; Old Westbury Funds | |||
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DBX ETF Trust
Board Members and Officers (Unaudited) (Continued)
| Officers(2) |
||
| Name, Year of Birth, Position with the Trust and Length of Time Served(4) |
Business Experience and Directorships During the Past 5 Years | |
| Freddi Klassen(5) (1975) President and Chief Executive Officer, 2016- present |
Director(3) in DWS and Chief Operating Officer in the Americas for the Traditional Asset Classes Department (2014-present); Manager and Chief Operating Officer of DWS Investment Management Americas, Inc. (2018-present) and the Advisor (2016-present); Global Chief Operating Officer for Equities Technology in the Investment Bank Division at Deutsche Bank AG (2013-2014); Chief Operating Officer for Exchange Traded Funds and Systematic Funds in Europe (2008-2013). | |
| Luke Oliver(5) (1980) Chief Operating Officer, 2019-present |
Managing Director(3) in DWS (2017-present); Director(3) in DWS (2009-2017); Head of Passive Americas Asset Management Platform (2019-present); Manager, Chief Executive Officer and Chief Investment Officer of the Advisor (2019-present); Head of ETF Capital Markets, Americas (2012-2018); Lead Portfolio Manager of PowerShares DB ETFs (2009-2012). | |
| Diane Kenneally(6) (1966) Treasurer, Chief Financial Officer and Controller, 2019- present |
Director(3) in DWS; Chief Financial Officer and Treasurer for DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (2018-present); Treasurer and Chief Financial Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2018-present); formerly: Assistant Treasurer for the DWS funds (2007-2018). | |
| Frank Gecsedi(5) (1967) Chief Compliance Officer, 2010-present |
Director(3) in DWS Compliance Department (2016-present), Vice President in the Deutsche Asset Management Compliance Department at Deutsche Bank AG (2013-2016) and Chief Compliance Officer of the Advisor (2010-present); Chief Compliance Officer of DWS Distributors, Inc. (2019-present); Vice President in Deutsche Bank’s Global Markets Legal, Risk and Capital Division (2010-2012). | |
| Bryan Richards(5) (1978) Vice President, 2016-present |
Managing Director(3) in DWS (2018-present); Director(3) in DWS (2014-2018); Portfolio Manager in the Passive Asset Management Department at DWS (2011-present); Primary Portfolio Manager for the PowerShares DB Commodity ETFs (2011-2015). | |
| John Millette(6) (1962) Secretary, 2020-present |
Director(3) in DWS US Retail Legal (2003-present); Vice President and Secretary of DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (1999-present); Chief Legal Officer, DWS Investment Management Americas, Inc. (2015-present); Director and Vice President of DWS Trust Company (2016-present); Secretary, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2011-present); formerly: Secretary of Deutsche Investment Management Americas Inc. (2015-2017); Assistant Secretary of DBX ETF Trust (2019-2020); Assistant Secretary (July 14, 2006-December 31, 2010) and Secretary (January 31, 2006-July 13, 2006), The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. |
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DBX ETF Trust
Board Members and Officers (Unaudited) (Continued)
| Name, Year of Birth, Position with the Trust and Length of Time Served(4) |
Business Experience and Directorships During the Past 5 Years | |||||
| Caroline Pearson(6) (1962) Assistant Secretary, 2020-present |
Managing Director(3) in DWS US Retail Legal; Chief Legal Officer of DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (2010-present); Chief Legal Officer, DBX Advisors LLC and DBX Strategic Advisors LLC (2020-present); Chief Legal Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2012-present); formerly: Secretary, Deutsche AM Distributors, Inc. (2002-2017); and Secretary, Deutsche AM Service Company (2010-2017). | |||||
| Paul Antosca(6) (1957) Assistant Treasurer, 2019-present |
Director(3) in DWS; Assistant Treasurer for DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (2007-present). | |||||
| Jeffrey Berry(6) (1959) Assistant Treasurer, 2019-present |
Director(3) in DWS. | |||||
| Sheila Cadogan(6) (1966) Assistant Treasurer, 2019-present |
Director(3) in DWS; Assistant Treasurer for DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (2017-present); Director and Vice President, DWS Trust Company (2018-present); Assistant Treasurer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (2018-present). | |||||
| Christina A. Morse(7) (1964) Assistant Secretary, 2017-present |
Vice President at BNY Mellon-Asset Servicing (2014-present); Vice President and Counsel at Lord Abbett & Co. LLC (2013-2014). | |||||
| Michelle Goveia-Pine(5) (1970) Interim Anti-Money Laundering Compliance Officer, since July 9, 2020 |
Director(3) in DWS; Interim AML Officer, DWS Trust Company (since July 28, 2020); and Interim AML Officer of DWS US registered investment companies advised by DWS Investment Management Americas, Inc. (since July 10, 2020); Interim AML Officer, The European Equity Fund, Inc., The New Germany Fund, Inc. and The Central and Eastern Europe Fund, Inc. (since July 24, 2020). | |||||
| (1) | The length of time served is represented by the year in which the Board Member joined the Board. |
| (2) | As a result of their respective positions held with the Advisor and its affiliates, these individuals are considered “interested persons” of the Advisor within the meaning of the 1940 Act. Interested persons receive no compensation from the Funds. |
| (3) | Executive title, not a board directorship. |
| (4) | The length of time served is represented by the year in which the officer was first elected to the Trust in such capacity. |
| (5) | Address: 875 Third Avenue, New York, New York 10022. |
| (6) | Address: 100 Summer Street, Boston, MA 02110. |
| (7) | Address: BNY Mellon Asset Servicing, 240 Greenwich Street, New York, NY 10286. |
The Funds’ Statement of Additional Information (“SAI”) includes additional information about the Funds’ Board Members. The SAI is available by calling 855-329-3837, or on the Company’s website at www.Xtrackers.com.
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DBX ETF Trust
Proxy Voting Policies and Procedures
The Funds’ policies and procedures for voting proxies for portfolio securities and information about how each Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 are available on our Web site — www.Xtrackers.com (click on “Resources” and “Proxy Voting” at the top of the page) — or on the SEC’s Web site — www.sec.gov. To obtain a written copy of the Funds’ policies and procedures without charge, upon request, call us toll free at 855-329-3837.
Portfolio Holdings Information
The Funds are required to file their complete schedule of portfolio holdings with the SEC for their first and third fiscal quarters on Form N-PORT. Copies of the filings are available without charge, upon request on the SEC’s website at www.sec.gov and are available by calling the Trust at 855-329-3837.
Information about each Fund’s portfolio holdings is available daily at www.Xtrackers.com.
Discount/Premium Information
Information regarding how often shares of each Fund traded on NYSE Arca or Cboe, as applicable, at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV of the Fund can be found at www.Xtrackers.com.
Tax Information
Form 1099-DIV and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.
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DBX ETF Trust
DBX Advisors LLC (“Advisors”) collects non-public information about you from the following sources: (i) information received from you on applications or other forms; and (ii) information about your transactions with the Advisors, Advisors’ affiliates and third-party service providers and vendors. Advisors does not disclose any non-public personal information about you to anyone, other than as set forth below, as permitted by applicable law and regulation. Advisors may disclose non-public personal information about you to the funds in which you invest, to Advisors’ affiliates, and to non-affiliated companies that work with Advisors to service your account(s), or to provide services or process transactions that you have requested. Advisors may disclose non-public personal information in situations that may include, but are not limited to, in response to legal and/or regulatory inquiries and the proposed or actual sale, assignment merger or other transfer of all or a portion of Advisors’ business to another business entity. Advisors may also disclose non-public personal information about you to parties representing you, such as your investment representative, your accountant, your tax advisor, or to other third parties at your direction/consent. Advisors will not sell, rent, license or trade your personal and financial information to or with third parties for their own direct marketing use unless you give us general or specific consent to do so. If you decide to close your account(s) or become an inactive customer, Advisors will adhere to the privacy policies and practices as described in this notice. Advisors restricts access to your personal and account information to those employees who need to know that information to provide products and services to you. Advisors maintains reasonable and customary physical, electronic and procedural safeguards to guard your non-public personal information.
California residents may go to https://fundsus.dws.com/us/en-us/legal-resources/privacy-policy.html to obtain additional information relating to their rights under California state law.
Advisors reserves the right, at their discretion, to change, modify, add, or remove portions of this Privacy Policy Notice, and any of the policies described herein, at any time. Advisors will indicate any such changes to the Privacy Policy Notice at the privacy link which can be found at www.Xtrackers.com. At all times, you are bound by the then-current version of the Privacy Policy and all applicable laws. Advisors highly recommends that you review this Privacy Policy Notice from time to time to ensure that you are familiar with the most recent version. The examples contained in this Privacy Policy Notice are illustrations; they are not intended to be exclusive.
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DBX ETF Trust
This report is intended for the shareholders of the DBX ETF Trust.
This report must be preceded or accompanied by a prospectus.
Investing involves risk, including the possible loss of principal. Bond investments are subject to interest rate, credit, liquidity and market risks to varying degrees. When interest rates rise, bond prices generally fall. Foreign investing involves greater and different risks than investing in U.S. companies, including currency fluctuations, less liquidity, less developed or less efficient trading markets, lack of comprehensive company information, political instability and differing auditing and legal standards. With respect to each Fund except HYLB, investing in a single industry, or group of industries, country or in a limited geographic region generally are more volatile than more diversified funds. Investments in lower-quality (“junk bonds”) and non-rated securities present greater risk of loss than investments in higher-quality securities. Distressed securities are speculative and involve substantial risks beyond the risks of investing in junk bonds, such as no interest payments or repayment of principal, or the loss of the entire investment in the distressed security. Each Fund except HYLB, are currently non-diversified and can take larger positions in fewer issues, increasing their potential risk. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. Investing in derivatives entails special risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. Performance of the Funds may diverge from that of the Underlying Index due to operating expenses, transaction costs, cash flows, use of sampling strategies or operational inefficiencies. An investment in these Funds should be considered only as a supplement to a complete investment program for those investors willing to accept the risks associated with the Funds. Please read the prospectus for more information.
War, terrorism, economic uncertainty, trade disputes, public health crises (including the recent pandemic spread of the novel coronavirus) and related geopolitical events could lead to increased market volatility, disruption to U.S. and world economies and markets and may have significant adverse effects on the Funds and their investments.
Shares of the Funds are bought and sold at market price (not NAV) throughout the day on the NYSE Arca, Inc. or Cboe BZX Exchange, Inc., as applicable. Transactions in Fund shares may result in brokerage commissions and may generate tax consequences. There can be no assurance that an active trading market for shares of a Fund will develop or be maintained.
DBX ETF Trust Funds are distributed by ALPS Distributors, Inc. (“ALPS”) The Funds are managed by DBX Advisors LLC which is not affiliated with ALPS.
The brand DWS represents DWS Group GmbH & Co. KGaA and any of its subsidiaries such as DWS Distributors, Inc. which offers investment products or DWS Investment Management Americas Inc. and RREEF America L.L.C. which offer advisory services.
HYUP, HYDW, SHYL, and HYLB are not sponsored, endorsed, issued, sold or promoted in any other manner by Solactive AG (the “Licensor”) nor does the trademark or the Index Price at any time or in any other respect.
Copyright © 2020 DWS Group. All rights reserved. XtrackersTM is a trademark of DWS Investment GmbH. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.
Not FDIC Insured | No Bank Guarantee | May Lose Value
DBX ETF Trust
| Investment advisor DBX Advisors LLC 875 Third Avenue New York, NY 10022 |
Administrator, custodian, fund accounting agent, lending agent & transfer agent The Bank of New York Mellon 240 Greenwich Street New York, NY 10286 |
Distributor ALPS Distributors, Inc. 1290 Broadway Suite 1000 Denver, CO 80203 | ||
| Independent registered public accounting firm Ernst & Young LLP 5 Times Square New York, NY 10036 |
Legal counsel Dechert LLP 1095 Avenue of the Americas New York, NY 10036 |
|||
R-052201-4 (10/20) DBX004597 (10/21)
Item 2. Code of Ethics.
| (a) | The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. |
| (b) | There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. |
| (c) | The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item’s instructions. |
Item 3. Audit Committee Financial Expert.
Stephen R. Byers, George O. Elston, and J. David Officer are the designated financial experts on the Audit Committee of DBX ETF Trust. With respect to DBX ETF Trust, Stephen Byers, George O. Elston, and J. David Officer are not “interested persons” as such terms are defined by Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Item 4. Principal Accountant Fees and Services.
Audit Fees
| (a) | The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $284,595 for 2020 and $372,680 for 2019. |
Audit-Related Fees
| (b) | The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item are $0 for 2020 and $0 for 2019. |
Tax Fees
| (c) | The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $235,418 for 2020 and $304,417 for 2019. |
All Other Fees
| (d) | The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item, are $0 for 2020 and $0 for 2019. |
| (e)(1) | Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. |
In accordance with Rule 2-01(c)(7)(A), the Audit Committee pre-approves all of the audit and permissible non-audit services of the Registrant.
| (e)(2) | All of the services described in paragraphs (b) through (d) above were approved by the Audit Committee in accordance with paragraph (c) (7) (i) (c) of Rule 2-01 of Regulation S-X. |
| (f) | Not Applicable. |
| (g) | The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $0 for 2020 and $0 for 2019. |
| (h) | The registrant’s audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. |
Item 5. Audit Committee of Listed Registrants.
The Registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act and has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Registrant’s audit committee members are Stephen R. Byers, George O. Elston, and J. David Officer.
Item 6. Investments.
| (a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this Form. |
| (b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.
Item 11. Controls and Procedures.
| (a) | The Chief Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. |
| (b) | There have been no changes in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| (Registrant) | DBX ETF Trust |
| By (Signature and Title) | /s/ Freddi Klassen | |
| Freddi Klassen | ||
| President and Chief Executive Officer |
| Date | November 5, 2020 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By (Signature and Title) | /s/ Freddi Klassen | |
| Freddi Klassen | ||
| President and Chief Executive Officer |
| Date | November 5, 2020 |
| By (Signature and Title) | /s/ Diane Kenneally | |
| Diane Kenneally | ||
| Treasurer and Chief Financial Officer |
| Date | November 5, 2020 |