Xtrackers MSCI Emerging Markets Hedged Equity ETF

Xtrackers MSCI Emerging Markets Hedged Equity ETF (DBEM), from DWS, tracks the MSCI EM US Dollar Hedged Index. That means emerging market stocks led by Taiwan Semiconductor, Samsung and SK Hynix, plus currency contracts meant to cancel out moves in foreign currencies against the US dollar. Most emerging market funds don't have that hedge. The trade-off is cost: its 0.66% expense ratio is well above the 0.25% average of similar funds.

• Over the year to Oct 27, 2026, DBEM returned +15.8%, 2nd of 9 among similar funds.
• Its 5-year annualized return was +8.1% and its 10-year +8.6%.
• In the 2020 COVID crash it fell 27.5% and regained its old high 3.6 months after the low.
• Its worst full calendar year was 2022 (-17.0%); its best was 2025 (+30.4%).
• The deepest fall in its price history was 33.5% (Feb 17, 2021 to Oct 24, 2022), recovered by Jul 17, 2025.

As of Aug 31, 2026, the fund held 1,151 securities; the ten largest made up 36.74% of assets.

• Over the three months to Aug 31, 2026, investors added a net $9.8M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -0.19%, -4.99%, +1.99%.

DBEM is a passive, or indexing, fund. It aims to match the MSCI EM US Dollar Hedged Index before fees. It normally uses full replication, which means it buys the stocks in the index in roughly the same weights the index gives them. If some shares can't be bought because of limited supply or local rules, it may instead hold a representative sample with similar size, industry and yield traits. As of July 31, 2026, the index held 1,244 securities. China, Taiwan and India had large weights, as did the information technology and financials sectors. The index normally rebalances monthly.

The currency hedge is what sets the fund apart. The fund uses forward contracts, which are agreements to exchange currencies at a set rate on a future date. These include non-deliverable forwards, which settle the difference in cash instead of exchanging the actual currencies. Each contract is sized from that currency's weight at the start of each month. If the dollar rises against, say, the Korean won, the hedge offsets the loss an unhedged holder would take. If the dollar falls, the hedge gives up that gain. It does not protect against falling stock prices.

As of August 31, 2026, the fund held 101 derivative positions. The largest was a Korean won contract with JPMorgan Chase Bank. The fund may also lend up to one-third of its assets to approved institutions in exchange for collateral.

• DBEM charges 0.66% a year, versus an average of 0.25% for the similar funds below (8th of 9, cheapest first).
• Of that, 0.65% is the management fee; the rest covers other fund expenses.
• Using the prospectus's standard example, $10,000 invested would cost about $67 in the first year and $822 over 10 years (assuming a 5% annual return).

It is a volatile, higher-cost, single-region stock fund, better suited to a small slice of a portfolio than to its foundation.

DBEM offers emerging market stocks without the swings in foreign currencies, but it has had deep drops. It launched in June 2011, so it has no record from the 2008 crisis. In the 2020 COVID crash it fell 27.5% and recovered in about 3.6 months. In the 2022 bear market it fell 25% and took 21 months to recover. Its worst calendar year was 2022, at -17.09%. Its deepest drop, 33.5% from February 2021 to October 2022, took 32.8 months to recover. Anyone who has to sell during a stretch like that locks in losses.

As of October 27, 2026, it paid $0.83 per share over the prior 12 months, a 2.27% yield, in two payments a year. Under the SEC's standard example, $10,000 invested would cost $67 in the first year and $822 over 10 years. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.