LGIM cross-lists six ‘disruptive technology’ ETFs on SIX Swiss

Jun 11th, 2020 | By | Category: Equities

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Legal & General Investment Management (LGIM) has cross-listed six thematic equity ETFs into the Swiss market.

LGIM cross-lists six ‘disruptive technology’ ETFs on SIX

LGIM has cross-listed six disruptive technology ETFs on SIX Swiss Exchange.

The funds target disruptive technology themes that capitalize on investment opportunities in artificial intelligence, healthcare innovation, pharmaceutical breakthroughs, clean water, energy storage, and e-commerce logistics.

Each ETF has listed in Swiss francs on SIX Swiss Exchange and comes with an expense ratio of 0.49%.

Income is accumulated within the portfolios.

The funds complement existing disruptive technology ETFs offered by LGIM on SIX that target cybersecurity and robotics & automation themes.

Artificial intelligence

The L&G Artificial Intelligence UCITS ETF (AIAI SW) tracks the ROBO Global Artificial Intelligence Index which selects its constituents from a universe of developed and emerging market stocks that have market capitalizations greater than $200 million.

The index harnesses ROBO Global’s industry classification system to identify companies with operations in eleven sub-sectors linked to artificial intelligence: business process; consulting services; big data analytics; cloud providers; network security; cognitive computing; e-commerce; healthcare; factory automation; semiconductor; and consumer.

Each eligible company is individually analyzed and assigned a thematic score between 1 and 100 based on factors such as the proportion of revenue attributable to relevant subsectors, the level of investment made into artificial intelligence, and the firm’s leadership position within its market.

The 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 artificial intelligence theme. Reconstitution and rebalancing occur on a quarterly basis.

Healthcare innovation

The L&G Healthcare Breakthrough UCITS ETF (DOCT SW) tracks the ROBO Global Healthcare Technology and Innovation Index which uses the same methodology as described above but focuses on healthcare innovators by selecting firms with operations in eight key sub-sectors: diagnostic; lap process automation; regenerative medicine; precision medicine; data and analytics; telehealth; robotics; and medical instruments.

Pharmaceutical breakthroughs

The next four ETFs track Solactive indices that select their constituents from an initial universe of developed market stocks with market capitalizations greater than $200 million.

The L&G Pharma Breakthrough UCITS ETF (BIOT SW) tracks the Solactive Pharma Breakthrough Value Index which provides exposure to companies that are actively engaged in the research, development, or manufacturing of orphan drugs – pharmaceutical products that have been developed specifically to treat rare diseases or disorders.

The methodology harnesses insights from EvaluatePharma, an analytics firm focused on the pharmaceutical industry, to select firms with significant revenue exposure to existing orphan drugs as well as companies in the final stages of testing and producing new orphan drugs.

Constituents are equally weighted within the index and rebalanced on a semi-annual basis.

Clean water

The L&G Clean Water UCITS ETF (GLUG SW) tracks the Solactive Clean Water Index. Using research from Global Water Intelligence, the index 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 in the index subject to certain 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.

Energy storage

The L&G Battery Value-Chain UCITS ETF (BATT SW) tracks the Solactive Battery Value-Chain Index. The methodology harnesses insights from data providers Clean Horizon and Fastmarkets to source companies that supply electrochemical energy storage technologies as well as mining companies that produce lithium which is used to manufacture batteries.

Constituents are equally weighted in the index and rebalanced semi-annually.

E-commerce logistics

The L&G Ecommerce Logistics UCITS ETF (ECOM SW) tracks the Solactive eCommerce Logistics Index which targets logistics service providers and technology companies who are engaged in e-commerce. The methodology harnesses data from Transport Intelligence to source companies linked to the e-commerce logistics theme.

Constituents are also equally weighted in the index and rebalanced semi-annually.

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