The Trend MSCI Emerging Markets ESG ETF (ESGE11) is a Brazilian exchange-traded fund designed to track the performance of the MSCI Emerging Markets Extended ESG Focus Index, a benchmark representing large- and mid-cap companies across emerging markets while incorporating environmental, social, and governance (ESG) considerations.

Managed by XP Asset Management, the ETF trades under the ticker ESGE11 on the B3 and provides Brazilian investors with international equity exposure to emerging-market companies through an ESG-focused portfolio construction methodology. Classified as an international equity ETF, ESGE11 follows a passive management strategy.

The fund seeks to track the MSCI Emerging Markets Extended ESG Focus Index, which uses the MSCI Emerging Markets Index as its parent universe. The methodology is designed to increase exposure to companies with favorable ESG characteristics while maintaining overall risk and return characteristics similar to those of the broader parent index.

ESGE11 therefore combines diversified emerging-market equity exposure with a methodology that incorporates sustainability considerations into portfolio construction.

Composition / Exposure Profile

ESGE11 provides exposure primarily to:

• Large- and mid-cap companies across emerging markets.

• Asian, Latin American, Middle Eastern, and other emerging economies.

• Multiple sectors of the global economy.

• Companies selected according to environmental, social, and governance criteria.

• International equity markets.

• Foreign currency movements.

The MSCI Emerging Markets Extended ESG Focus Index starts with the constituents of the MSCI Emerging Markets Index. From this universe, its methodology uses an optimization process designed to increase exposure to positive ESG factors while maintaining risk and return characteristics broadly similar to those of the parent emerging-markets benchmark.

The methodology also excludes companies involved in certain business activities that do not meet the index's eligibility criteria. These include tobacco, controversial weapons, civilian firearms, thermal coal, and oil sands.

Structure and Costs

ESGE11 shares trade on the secondary market on the B3 during regular trading hours, with investors able to trade the ETF starting from one share. The fund charges an annual management fee of 0.30%.

ESGE11 is not designed to make recurring income distributions to shareholders. Returns generated by the underlying investments are reflected in the fund's net asset value and share price.

Because the strategy provides international exposure, returns measured in Brazilian reais also incorporate the effects of foreign exchange movements between the real and the currencies represented by the underlying portfolio.

History and Evolution of the ETF

The Trend MSCI Emerging Markets ESG ETF was launched in 2021 to provide Brazilian investors with exchange-traded access to emerging-market companies selected through an ESG-focused methodology. ESGE11 shares began trading on the B3 that year.

ESGE11 was introduced alongside ESGD11, which targeted developed markets outside the United States and Canada. Together, the three funds expanded the range of internationally focused ESG ETFs available to Brazilian investors.

Since its launch, ESGE11's performance has reflected both broader emerging-market cycles and the relative performance of companies selected under the benchmark's ESG methodology. Economic growth in China and other emerging economies, global monetary policy, international capital flows, and foreign exchange movements are among the factors that influence the strategy.

Additional Information

Trend ETF MSCI Emerging Markets ESG (Brazil) is an exchange-traded fund (ETF), with assets under management totaling $-.

Over the past 12 months, Trend ETF MSCI Emerging Markets ESG recorded a return of 0.00%, with its price trading between $0.00 and $0.00 during the same period.

The ETF is traded under the ticker ESGE11.