Xtrackers Net Zero Pathway Paris Aligned US Equity ETF

Xtrackers Net Zero Pathway Paris Aligned US Equity ETF (USNZ) tracks the Solactive ISS ESG United States Net Zero Pathway Enhanced Index, a screened group of about 300 large and mid-sized US companies. It removes companies tied to fossil fuels, weapons, tobacco and other excluded businesses. It then weights the rest so the index's carbon intensity is at least 50% below its parent index. It charges 0.10% a year, a bit above the 0.08% average of similar funds.

• Over the year to Oct 27, 2026, USNZ returned +12.8%, 4th of 9 among similar funds.
• Its worst full calendar year was 2025 (+17.8%); its best was 2023 (+27.8%).
• The deepest fall in its price history was 19.2% (Feb 19, 2025 to Apr 8, 2025), recovered by Jun 26, 2025.

As of Aug 31, 2026, the fund held 297 securities; the ten largest made up 44.46% of assets.

By sector

• Over the three months to Aug 31, 2026, investors withdrew a net $6.2M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -1.33%, +0.03%, +3.08%.

The index starts with the Solactive GBS United States Large & Mid Cap Index. That index covers roughly the largest 85% of the US market by free-float value, meaning shares available to the public. Solactive uses data from Institutional Shareholder Services (ISS) to remove several groups. These are companies that break global norms on environment, human rights, corruption or labor, and companies tied to controversial weapons. Companies rated D- by ISS are out. So are those earning a set share of revenue from areas such as fossil fuels, Arctic or deepwater drilling, tobacco, weapons, alcohol, gambling or cannabis.

The remaining stocks get starting weights based on their emissions-cutting targets, climate disclosure and "green" revenue. The index is then tuned so that its carbon intensity is at least 50% below the parent index and aims to fall at least 7% a year. Carbon intensity means emissions relative to company value. The tuning also keeps at least the parent's exposure to sectors key to the low-carbon shift. The fund does not plan to report later whether past rebalances met these targets.

USNZ uses full replication, holding the index's stocks in about the same weights. It may switch to a representative sample if some stocks are hard to buy. Portfolio turnover was 12%. As of August 31, 2026, Nvidia, Apple and Microsoft made up about 25% of assets.

• USNZ charges 0.1% a year, versus an average of 0.08% for the similar funds below (7th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $10 in the first year and $128 over 10 years (assuming a 5% annual return).

It holds about 300 large and mid-sized US stocks with climate screens built in, so it could fill the US stock part of a portfolio for investors who want those screens.

USNZ has a short record. It launched on June 28, 2022, so it missed the 2008 and 2020 crashes and caught only part of the 2022 bear market. Its deepest drop was 19.2%, from February 19 to April 8, 2025. It recovered in about 2.6 months. It has not lost money in any full calendar year so far. Its weakest year was 2025, when it still gained 17.8%. As of August 31, 2026, 41% of the fund was in technology, and its one-year beta was 1.1. That suggests it could fall harder than the broad market in a tech-led sell-off. Anyone drawing income might then have to sell shares at low prices. The fund pays little income: a 0.92% yield as of October 27, 2026, paid quarterly. In the SEC's standard $10,000 example, costs total $128 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.