Lyxor Asset Management has outlined a roadmap to grow its ETF business by focusing on three key product pillars – ESG & climate, thematic, and core.
Arnaud Llinas, Head of ETFs and Indexing at Lyxor Asset Management.
According to Lyxor, these strategic priorities will help meet the long-term needs of wealth managers and institutional clients as ETF usage in Europe continues to expand.
Arnaud Llinas, Head of ETFs and Indexing at Lyxor Asset Management, said: “Having started as tactical allocation building blocks for institutional investors, ETFs have since become long-term savings instruments for a much wider range of investors including in the wealth management segment. That is only going to accelerate.
“Our shift in focus aims at addressing investors’ long-term concerns – aiding the transition to a low-carbon economy, capturing new themes in a post-Covid world, and ensuring maximum efficiency for their investments – and as such reflects the profound change in nature of the ETF market.”
ESG & climate
The issuer has said that it aims to double assets under management within its range of socially responsible ETFs to €10 billion by the end of 2021. While this might appear an ambitious target, ESG ETFs in Europe experienced record inflows in 2020, accounting for more than half of total net new assets across the continent. Efforts will also be boosted by plans to switch several of its existing regular beta index ETFs over to ESG equivalents.
Lyxor has indicated that it intends to build out its offering of climate-focused strategies, including in the fixed income space. Its first climate-related ETFs debuted last year and have already grown to over €1.5bn in assets. It presently offers a modest line-up of equity ETFs aligned with the Paris Agreement and a pair of fixed income ETFs targeting green bonds.
Thematic
Lyxor launched a suite of global thematic ETFs in partnership with MSCI in 2020 targeting the digital economy, disruptive technologies, future mobility, smart cities, and millennials’ consumer habits. The five funds have since collectively grown to over €700 million in assets.
Building on this success, the issuer plans to offer wealth managers, in particular, more ways to invest in companies benefitting from post-Covid trends. It highlights clean technology and healthcare as specific areas of focus for product development.
Core
Lyxor refers to its “core” ETF range as the cornerstone of its product offering. Since launching in 2017, the funds have experienced strong demand from various types of investors looking to manage their portfolios as efficiently as possible.
The issuer has a raft of initiatives planned for 2021. It notes further regional and single-country equity allocations as areas of interest, while additional core fixed income products will target inflation strategies, an area that has risen in prominence due to central banks and governments spending freely to fuel a post-pandemic recovery.