The new fund provides diversified access to multiple long-term themes
Legal & General Investment Management (LGIM) has today announced the launch of a Global Thematic Fund. Through this fund, investors will be able to access multiple investment themes focused on innovation and long-term growth while seeking to maximise diversification.
The fund, which is structured as an onshore unit trust, has been designed specifically for UK investors following an increasing demand for access to multiple themes. As a renowned specialist[1] in constructing thematic investment funds, LGIM has brought together eight investment themes into the Legal & General Global Thematic Fund (‘the Fund’), in the areas of technology, energy and resources and changing demographics, all of which are currently available to investors via a suite of L&G building-block ETFs.
By combining the investment universes of its existing individual thematic strategies, LGIM has created a simple and easily accessible fund for investors seeking exposure to a portfolio of companies that we believe are positioned to benefit from these long-term themes. This fund brings together LGIM’s deep expertise in active index design, active research, and investment stewardship alongside tracker-like implementation.
With an underlying investment universe of just over 400 stocks the Fund uses a quantitative allocation model to provide exposure to growth themes while seeking to maximise diversification. This model aims to improve overall portfolio volatility and return characteristics as each theme evolves over time, weighting the underlying thematic strategies so that they contribute approximately the same level of risk to the Fund. The underlying thematic strategies invest in unique stocks not typically captured by traditional market cap weighted benchmarks, and the Fund therefore allows investors to complement their existing investments with exposure to a wider range of growth-oriented companies.
James Crossley, LGIM’s Head of UK Retail Sales, commented: “Thematic investing has risen in popularity in recent years, thanks to its ability to capitalise on the structural and foundational changes shaping our society.
“However, we often hear from clients about the challenges of accessing ETFs and having to choose between specific investment themes, and in designing the Global Thematic Fund, we wanted to make that decision easier. By providing a single point of entry to a diversified universe of companies, the fund offers investors access to a broad range of growth opportunities. We believe it to be an attractive proposition for advisers seeking differentiated investment ideas for clients and a unique and cost-effective way to invest in the themes that are shaping the future of our environment, work and society.”
The Fund’s investment universe comprises of eight of LGIM’s existing and increasingly popular thematic ETF investment strategies[2], providing exposure to multiple global growth themes across three broad categories:
| Theme | Investment exposure | |
| Technology | Artificial intelligence | Exposure to companies leading the development and application of artificial intelligence technologies, designed in collaboration with industry experts at ROBO Global |
| Robotics & Automation | Exposure to a specialised basket of robotics and automation companies, designed in collaboration with industry experts at ROBO Global. | |
| Cyber Security | Broad global exposure to a unique basket of companies driving improvements in cyber security, designed in collaboration with industry experts at Nasdaq. | |
| Energy and Resources | Battery Value-chain | Global exposure to battery technology and mining companies, designed in collaboration with industry experts at Clean Horizon and FastMarkets. |
| Clean water | Exposure to companies specialising in the field of clean water and water technology, designed in collaboration with industry experts at Global Water Intelligence. | |
| Demographics | eCommerce Logistics | Global exposure to a select basket of companies that are facilitating the logistics of ecommerce, designed in collaboration with industry experts at Transport Intelligence. |
| Healthcare Breakthrough | Exposure to a basket of specialised healthcare technology and innovation companies, designed in collaboration with industry experts at ROBO Global. | |
| Pharma Breakthrough | Global exposure to a select basket of companies that are engaged in the R&D of orphan drugs that combat rare diseases, designed in collaboration with industry experts at EvaluatePharma. |
Commenting on the fund’s launch, Aanand Venkatramanan, Head of ETF Investment Strategies at LGIM, said: “The Global Thematic Fund complements the success of LGIM’s ETF and thematic businesses, offering clients simple access to diversified themes, which traditionally have been difficult to capture in a single product. We are proud of the strong track record of the existing strategies within our thematic universes and are pleased to bring the investment philosophy to a wider investor audience.”
The Fund itself will be managed by Dave Barron, Head of Index Equity and Smart Beta at LGIM and is benchmarked against the MSCI World Total Return Net Index. As one of the largest providers of index funds in the UK, LGIM has offered index products to customers for over 30 years. This fund will leverage LGIM’s scale, index and ETF expertise while seeking to minimise transaction costs, savings which can be passed back to investors.
[1] LGIM’s ETF team launched Europe’s first battery, cybersecurity, ecommerce, and hydrogen ETFs
[2] As at the end of February 2021, LGIM was in the top 5 providers in net inflows according to sector research provider ETFGI
