Legal & General Investment Management (LGIM) has cross-listed three thematic ‘disruptive technology’ ETFs on Xetra and Borsa Italiana.
LGIM’s suite of disruptive technology ETFs is now available on London Stock Exchange, Deutsche Börse Xetra and Borsa Italiana.
They include the L&G Artificial Intelligence UCITS ETF, the L&G Healthcare Breakthrough UCITS ETF, and the L&G Clean Water UCITS ETF.
The funds, which launched on the London Stock Exchange in July 2019, are designed to capitalize on investment opportunities in artificial intelligence, healthcare, and clean water.
To deliver focused, pure-play exposure to the target investment themes, LGIM has engaged niche specialists ROBO Global and Global Water Intelligence to provide domain industry insight across the full value chain of the AI and healthcare, and water themes, respectively.
Artificial Intelligence and Healthcare Breakthrough
The L&G Artificial Intelligence UCITS ETF and L&G Healthcare Breakthrough UCITS ETF are linked to the ROBO Global Artificial Technology Index and ROBO Global Healthcare Technology and Innovation Index, respectively. The indices have been created by ROBO Global, the advisory and indexing firm behind LGIM’s $900 million robotics ETF, and are maintained by Solactive.
The indices select constituents from a universe of developed and emerging market stocks that have market capitalizations greater than $200 million and three-month average daily trading values of at least $1m. The indices then use ROBO Global’s industry classification system to identify companies with operations in sub-sectors linked to AI or healthcare technology.
There are eleven relevant sub-sectors for AI: business process; consulting services; big data analytics; cloud providers; network security; cognitive computing; e-commerce; healthcare; factory automation; semiconductor; and consumer. For healthcare innovators, there are eight key sub-sectors: diagnostic; lap process automation; regenerative medicine; precision medicine; data and analytics; telehealth; robotics; and medical instruments.
Each eligible company is individually analyzed and assigned a score between 1 and 100 based on factors such as the proportion of revenue attributable to relevant subsectors, the level of investment made into AI or healthcare technologies, and the firm’s leadership position within its market.
The index methodology then selects the highest-scoring companies with scores above 50, up to a maximum of 100 stocks. If fewer than 50 stocks have scores above 50, the index selects the highest-scoring companies until 50 constituents have been chosen. Constituents are weighted according to their scores so as to heighten exposure to the underlying theme. Each index is reconstituted and rebalanced on a quarterly basis.
The artificial intelligence ETF is available to trade in euros on Xetra (XMLD GY) and Borsa Italiana (AIAI IM). Its original listings on LSE are in US dollars (AIAI LN) and pound sterling (AIAG LN).
Similarly, the healthcare breakthrough ETF trades in euros on Xetra (XMLH GY) and Borsa Italiana (DOCT IM). Its LSE listings are in US dollars (DOCT LN) and pound sterling (DOCG LN).
Clean Water
The L&G Clean Water UCITS ETF tracks the Solactive Clean Water Index, designed by Solactive and based on research from Global Water Intelligence.
The index methodology starts with the same selection universe as the AI and healthcare indices but focuses on companies integral to the world’s management of water, including those engaged in water production, processing, and the provision of related services.
The methodology selects companies classified as utilities with at least 90% water revenue share – revenue derived from products and services related to the water industry. The index also selects engineering companies with at least 50% water revenue share and technology companies with a minimum 5% water revenue share.
Constituents are equally weighted subject to certain the constraints that cap the maximum weight of stocks that do not meet certain liquidity thresholds. Caps of 1%, 2%, and 3% are applied to stocks with three-month daily trading values below $2m, $3m, and $4m respectively.
The ETF is available in euros on Xetra (XMLC GY) and Borsa Italiana (GLUG IM) as well as on LSE in US dollars (GLUG LN) and pound sterling (GLGG LN).
All three ETFs comes with total expense ratios of 0.49%.