Legal & General Investment Management (LGIM) has expanded its range of thematic exchange traded funds (ETFs) with the launch of three new funds capturing the investment opportunities created by innovations in artificial intelligence, healthcare breakthroughs and clean water.
The launch adds to LGIM's existing thematic and core ETFs, which include the $904m L&G Cyber Security Ucits ETF and $919m L&G ROBO Global Robotics and Automation Ucits ETF.
The ETFs are designed to invest in markets that are experiencing the potential for rapid growth due to significant changes driven by technological advancements, providing investors with access to companies that are creating solutions to longstanding challenges.
To provide investors with exposure to these themes, LGIM has developed unique indices through active research into these markets with industry experts at ROBO Global and Global Water Intelligence, who provide unique industry insight and fundamental research across the full value chain of the relevant theme.
These new ETFs, which are listed on the London Stock Exchange provide diversification across geographies, market capitalisation and sub sectors. Each of the funds uses full physical replication to offer investors direct and pure exposure to the theme. The bottom-up and concentrated approach helps investors to minimise overlap and over-exposure across their existing portfolios: for example, across LGIM's five pre-existing thematic ETFs, the average overlap in holdings with the MSCI World index is just 1.92% and the average weighting to small and mid-caps is 56%.
L&G Artificial Intelligence Ucits ETF will seek returns from the global market for AI solutions and applications, in which revenues are projected to grow from $16.2bn in 2018 to $31.2bn in 2025. In terms of index exposure, the fund will include companies building AI engine and platform solutions, as well as those applying AI capabilities for the purpose of digital transformation.
L&G Healthcare Breakthrough Ucits ETF will be formed of companies leading in the digitalisation of the healthcare supply chain, advances in healthcare robotics and next-generation diagnostic tools.
Investors in the L&G Clean Water Ucits ETF will seek returns from an index which is focused on companies integral to the world's management of water, including those engaged in water production, processing and the provision of other related services.