Xtrackers by DWS has launched two new ETFs in the US, broadening its European equity lineup for American investors.
The funds replicate respective strategies already introduced in Europe, which have performed strongly in recent months. The Xtrackers Europe Market Leaders ETF (XEML) selects companies with a dominant market position, competitive business advantage and superior profitability relative to peers. The Xtrackers Europe Defense Technologies ETF (XDEF), meanwhile, captures the performance of companies with existing revenues and patents exposure to three thematic segments: defense, space and cybersecurity.
As a “Gateway to Europe,” DWS aims to be a conduit for regional and international investors seeking to participate in Europe’s market potential. Vincenzo Vedda, the firm’s Chief Investment Officer, has argued that European equities are becoming more attractive as the region ramps up fiscal stimulus, boosts investment in defense and infrastructure, and advances economic reforms.[1] He has also pointed to comparatively lower valuations than in other major markets.
“We are excited to collaborate with DWS at a time when investors are turning to Europe for diversification and lower equity prices,” said Axel Lomholt, General Manager, STOXX. “Both indices underlying the new funds are examples of systematic strategies that seek to add alpha through bottom-up stock analysis or theme selection.”
Market Leaders
The Xtrackers Europe Market Leaders ETF was listed in December 2025. The fund tracks the STOXX® Europe Total Market Leaders index, which selects companies according to fundamental factors that have shown the potential to generate above-average investment returns: market leadership, competitive advantage and profitability.
The Market Leaders strategy aims to capitalize on Europe’s position as home to well-established global champions across multiple sectors. These companies benefit from structural moats built over decades through strong brands, intellectual property and sustained innovation. A core pillar of the strategy is the belief that scale or market capitalization — where Europe lags behind regions such as the US — does not necessarily equate to leadership, which is a more accurate reflection of market dominance.
For a full explanation of the index’s methodology, visit a recent article here.
Booming defense
The Xtrackers Europe Defense Technologies ETF was listed on February 19 and tracks the STOXX® Europe Total Market Defence Space and Cybersecurity Innovation 50-25 index.
Through the capture of company revenues and patents, the underlying index covers established suppliers of traditional military equipment and of more advanced defense systems, as well as those likely to play relevant roles in those fields in the future. Specialized innovators are pivotal in the advancement and evolution of the defense, space and cybersecurity sectors at a time when the European Union is directing investments towards the modernization of the region’s security capabilities.
Shares in European defense stocks have rallied since Russia’s invasion of Ukraine in 2022, and gains have accelerated as US President Donald Trump said Europe needs to forgo the American defense support that has been a pillar since 1945. The European Commission last March presented a package to help EU nations spend over EUR 800 billion in defense and in military research from European providers. NATO countries have called to increase defense investment from 2% of gross domestic product to 5%.[2]
For more information on the underlying STOXX Europe Total Market Defence Space and Cybersecurity Innovation index, read a recent article here. The index, part of STOXX’s Thematics series, incorporates capping parameters that align with US Regulated Investment Company (RIC) requirements.
Market gains
The STOXX Europe Total Market Leaders index jumped 29.5% in USD terms last year.[3] The STOXX Europe Total Market Defence Space and Cybersecurity Innovation 50-25 index performed even better, soaring 86% in 2025 and extending the total increase of 73% logged over the previous two years.[4]
With these recent launches, DWS and STOXX extend their collaboration and expand the opportunities for US investors at a time of increased interest in European equities.
[1] DWS, “Gateway to Europe,” September 23, 2025.
[2] NATO, “Defence expenditures and NATO’s 5% commitment,” December 18, 2025.
[3] Net return version.
[4] Returns before index launch are backtested.