Legal & General Investment Management (LGIM) has today announced the expansion of its ETF range with the launch of the L&G Global Brands UCITS ETF.
27 Sep 2023
The new fund continues to build on LGIM’s diverse range of ETFs and will provide investors with access to non-traditional investment opportunities through an innovative investment approach which focusses on companies with top global brands.
The Global Brands UCITS ETF is the first ETF of its kind to integrate brand value into the investment process and aims to give investors access to a diversified portfolio that captures companies with the world’s most valuable brands.
The ETF leverages the expertise of Brand Finance®, the leading global name in independent brand valuation and the first consultancy certified to provide ISO-compliant brand valuation and evaluation across industries. Brand Finance®’s established framework to determine brand value is based on five key metrics: Brand investment, Brand equity, Brand performance, Brand impact and Forecast revenues. Brands in the Brand Finance® Global 100 list are ranked by aggregate brand value from millions of datapoints. The funds’ index aims to track the performance of a basket of stocks based on those aggregate brand value scores, while also integrating liquidity, quality and ESG screens1. To reduce portfolio concentration, the investment strategy adopts a ‘capped market-cap’ weighting approach that restricts the weight of any company to a maximum of 5% on rebalancing days.
Richard Haigh, Managing Director, Brand Finance: "A business’s brand is one of its most important financial assets. Used correctly, strong brands can unlock vast financial value for businesses and shareholders. Brand Finance is excited to partner with LGIM to launch this ETF and demonstrate the added value that brands bring. This will continue to reaffirm the role of brand in the boardroom.”
The Global Brands ETF sits within LGIM’s ‘Access’ range, providing exposures that are designed to serve as a tactical or strategic tool for investors seeking ‘access’ to non-traditional investment opportunities. The fund’s investment strategy recognises and capitalises on the improved financial performance exhibited by companies with the top brands globally across all sectors, such as LVMH, Apple, Samsung and Visa2. Between 2016 and 2022, companies within the top 100 global brands list have, on average, exhibited 23% higher shareholder yield, 19% higher return on equity and 18% higher operating margin when compared to mega cap peers in the MSCI World3.
Aanand Venkatramanan Head of ETFs, EMEA at Legal & General Investment Management (LGIM): “From the phones in our pockets to the cars we drive, we are all familiar with brands and we have an instinctive grasp of their commercial value. We hope that the launch of this ETF will enable investors seeking exposure to such brands and companies that own them, gain access to a diversified portfolio of higher quality names that have historically demonstrated greater earnings resilience. We are pleased to partner with Brand Finance® whose research-based modelling and analysis is fundamental to this innovative and transparent investment proposition.
Additionally, investing in an index with ESG filters can help support companies that prioritize sustainability and ethical practices, which has increasingly gained importance for investors’ strategies.”
Timo Pfeiffer, Chief Markets Officer, Solactive: "Strong and valuable brands often have a history of consistent growth and customer loyalty. We are honored to expand our partnership with LGIM and collaborate with Brand Finance to be the index provider for the new L&G Global Brands UCITS ETF. The strategy can offer potential for long-term capital appreciation as these companies continue to innovate and expand their market presence.”
The fund is listed on the London Stock Exchange and Borsa Italiana and is expected to be listed shortly on XETRA Deutsche Boerse and SIX in Switzerland. It has been categorised as Article 8 under the Sustainable Finance Disclosure Regulation.
2For illustrative purposes only. Reference to a particular security is on a historic basis and does not mean that the security is currently held or will be held within an LGIM portfolio. The above information does not constitute a recommendation to buy or sell any security.
3Top 100 global brands as per Brand Finance®'s ranking. Statistics for the seven years ended 31 December 2022. Mega cap refers to those companies with market cap > $15bn. Analysis considered all sectors with sufficient representation of companies within the Top 100 Global Brands to enable comparison including: consumer discretionary, consumer staples, communication services, financials and information technology. Shareholder yield incorporates share buybacks in addition to dividend yield.
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which 39% is international. We have a unique and highly synergistic business model, which continues to drive strong returns. Legal & General provides powerful asset origination and management capabilities directly to clients, which also underpin our leading retirement and protection solutions. We are a leading international player in Pension Risk Transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Our purpose is to improve the lives of our customers and create value for our shareholders. Through inclusive capitalism, we are investing in long-term assets, such as real estate and infrastructure, that can help build a better society for the future.
*as at HY 2023
Legal & General Investment Management
LGIM is one of Europe’s largest asset managers and a major global investor, with total assets under management of £1.16 trillion1 ($1.47tn, €1.35tn, CHF 1.31tn). We work with a wide range of global clients, including pension schemes, sovereign wealth funds, fund distributors and retail investors.
For more than 50 years, we have built our business through understanding what matters most to our clients and transforming this insight into valuable, accessible investment products and solutions. We provide investment expertise across the full spectrum of asset classes including fixed income, equities, commercial property, and cash. Our capabilities range from index-tracking and active strategies to liquidity management and liability-based risk management solutions.
1 Data as at 30 June 2023. Data combines assets under management by LGIM in the UK, LGIMA in the US and LGIM Asia in Hong Kong.
Assets under management include securities and derivatives positions
*as at HY 2023