Paris-headquartered Lyxor Asset Management has launched its first ETF in Israel by listing the Lyxor Robotics & AI UCITS ETF (LYFF1 IT) on Tel Aviv Stock Exchange.
While Lyxor has been present in Israel since April 2017 through a collaboration with third-party marketing company 4F Distribution, this is the issuer’s first direct listing in the country.
Due to Israel’s standing as a hub for technology and innovation, Lyxor felt its robotics & AI strategy was the most appropriate choice for its debut listing.
The fund is linked to the proprietary Rise of the Robots NTR Index which was created by SG Index and based on the work of futurist Martin Ford.
The index screens for developed and emerging market stocks of companies that have been assigned to the robotics, automation, or AI industry classifications by the equity research department of Societe Generale, the parent company of Lyxor.
Each company is then assigned a composite score based on its relative positioning to other firms across three key ratios: R&D to sales, Return on Invested Capital (ROIC), and Sales Growth. Companies with higher ratios receive a higher composite score.
The methodology then selects the 150 stocks with the highest composite scores with constituents weighted by their composite score in order to further enhance exposure to the robotics and AI theme.
Over two-thirds (67.3%) of the index is allocated to stocks from the US with the next-largest country exposures being China (5.9%), the UK (3.6%), Taiwan (3.3%), and Japan (3.3%). Perhaps unsurprisingly, the index’s sector allocation is strongly tilted towards information technology which accounts for three-quarters (72.2%) of the total weight. The index is well-diversified at the constituent level with the largest exposure being Adyen at just 1.0%.
The ETF houses €350 million in assets and comes with an expense ratio of 0.40%.
The fund’s launch comes at a time of surging demand from Israeli institutional investors for non-domestic ETFs with research from financial information company Praedicta showing that this segment has grown by 45% over the past four years to reach €29 billion in assets under management.
Lyxor has stated it plans to roll out further ETFs in Israel over the coming months with a particular focus on socially responsible investments – in this domain, Lyxor offers ESG-focused, green bond, new energy, water, and climate-aligned strategies.
Matthieu Mouly, Chief Client Officer at Lyxor Asset Management, commented: “The listing of this first range of Lyxor ETFs on the Tel Aviv Stock Exchange represents a natural progression after Lyxor’s entry into the rapidly expanding Israeli ETF market four years ago. We can rely on the fruitful collaboration with our trusted partner 4F Distribution Israel to cater to the whole range of Israeli investors, from institutional to retail, with simple and affordable investment solutions.”
Liran Zvia, CEO of 4F Distribution Israel, added: “We are proud to have brought a brand like Lyxor to the local stock exchange. Lyxor is a pioneer in the areas of ESG, climate, and thematic investing and listing on the Tel Aviv Stock Exchange expands access to its ETFs to a broad client segment including bank advisors and portfolio managers.”
Ittai Ben-Zeev, CEO at Tel Aviv Stock Exchange, said: “Lyxor’s decision to list its ETFs is a real expression of confidence in the Israeli capital market and the Tel Aviv Stock Exchange. The listing will allow local investors to access a wider range of investments and is part of our strategic plan to expand the range of services and products available to Israeli investors.”