New fund expands on LGIM's thematics offering
14 May 2020
Legal & General Investment Management (LGIM) has today announced the launch of its first unlisted thematics index fund targeted at the UK retail market – the Legal & General Global Robotics and Automation Index Fund (the Fund), to service a growing client demand. In partnership with ROBO Global®, the Unit Trust will offer UK retail investors, primarily financial advisers and wealth managers, a new fund vehicle through which they can capture the investment opportunities created through the increasing adoption of robotics and automation technologies across all areas of society.
The Fund tracks the ROBO Global® Robotics and Automation UCITS Index, offering investors access to the same strategy as the successful L&G ROBO Global Robotics and Automation exchange-traded fund (ETF), which has so far amassed over $1 billion in assets under management. The Fund has been designed to give investors broad exposure to the global value chain of best-in-class robotics and automation companies as well as enabling technologies.
The increasing adoption of sophisticated robots and automation, enhanced by artificial intelligence (AI), is fast becoming an instrument of profound business and societal change, with the robotics and automation sector experiencing rapid growth, expected to be worth $353 billion by 20241. This is timely, given the focus and demand the sector has seen on the back of the global pandemic, where tech and automation companies have demonstrated growth opportunities as well as further resilience in outlook and future proofing. The index gives investors exposure to providers of key enabling technologies (sensing, computing, machine learning, actuation, etc.), as well as providers of applications that deliver capabilities in every industry (factory automation, surgical robotics, food and agriculture, 3D printing, logistics automation, and more). The computing and AI market alone is expected to see compound annual growth of 45% between 2017 and 20252.
The index is constructed and managed by research professionals with the guidance of industry experts, academics, and entrepreneurs who help identify tomorrow’s growth leaders and provide the knowledge and insight to forecast emerging trends and new technologies. Currently the index has 87 constituent companies across 14 countries and 12 proprietary subsectors. It also offers a highly diversified market cap exposure, with approximately 75% in small and mid-cap companies, and less than 2% overlap with traditional benchmarks.
The unique ROBO Global Robotics and Automation Index is developed through active research into these markets with sector specialists, selecting companies that cut across traditional industry classifications and disrupt incumbent large-caps that dominate conventional sector-based indices.
It captures fast-growing companies whose core business model focuses on robotics and automation, as well as established players whose businesses derive a distinct portion of their revenues from robotics and automation, and which have the potential to grow through their technology and innovation set. As at end of March 2020, the index had returned USD 50.56% over five years, compared to 17.31% by the MSCI World Net Total Return USD Index.
The fund launch builds on LGIM’s strong thematic and disruptive technology investing capabilities, which outside of Robotics and Automation currently include UCITS ETF focused on: Artificial Intelligence, E-Commerce Logistics, Battery Value-Chain, Healthcare Breakthrough, Clean Water, Cyber Security and Pharma Breakthrough.
James Crossley: "Investors are increasingly turning to thematic investment strategies, both to access the opportunities created by the disruptive megatrends shaping our society, and to provide greater diversification in portfolios. We have extensive experience in providing investors with access to these long-term structural trends and have seen significant demand for access to automation as an investment theme, via our robotics and automation ETF. We are excited to be launching a Unit Trust version to provide a broader set of investors with cost-effective exposure to this unique and high-growth strategy."
Richard Lightbound: "We believe robotics and automation have been the market’s best kept secrets for a while, and they have proven their worth over recent months, performing comparatively well amid the current turbulence. We launched the index back in 2013 and have a proven track record, remaining nimble and responding to fast-moving developments, to deliver strong returns and outperform major benchmarks. We are delighted to be partnering with LGIM again on the launch of this new fund, to help more investors capture the unique opportunities associated with this exciting sector."
Past performance is not a guide to the future.
The value of an investment and any income taken from it is not guaranteed and can go down as well as up; you may not get back the amount you originally invested.
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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