Legal & General launches L&G LSF African Government Bond (USD) UCITS ETF with seeding from FCDO
L&G's Asset Management business today announces that it has launched the L&G LSF African Government Bond (USD) UCITS ETF (‘the Fund’), with initial co-seeding provided by the UK Foreign, Commonwealth and Development Office (‘FCDO’) through its MOBILIST programme. The Fund’s launch represents an innovative partnership between a major global asset manager and a development finance programme, creating a new route for investors to access African sovereign debt through public markets. This is the first time that the FCDO has seeded an ETF.
The Fund will seek to track the performance of the iBoxx LSF USD African Sovereigns Index (‘the Index’), which was launched in 2024 and includes both investment grade and sub-investment grade bonds. The Fund’s approach will provide in-built diversification within African sovereign bonds, with explicit country caps/floor and eligibility rules to seek to manage concentration risk. It will focus on countries defined as eligible by the Liquidity and Sustainability Facility (‘LSF’) under its framework for secondary market operations.
Through the combination of a recognised index, a listed investment vehicle, and institutional capital, the initiative is designed to broaden investor participation in African sovereign bond markets by providing exposure to USD denominated fixed rate and/or zero-coupon bonds issued by sovereign issuers.
Connecting investors with African sovereigns
The LSF aims to support the liquidity of African sovereign and corporate issuances, lower the cost of finance, and increase liquidity of African capital markets. By facilitating pioneering fund launches such as this, it seeks to mobilise private investment in emerging African economies through public markets.
By bringing a Fund to market that seeks to track the performance of an Index designed by the LSF, L&G is enabling its clients to build a more targeted emerging market debt portfolio allocation, while supporting broader efforts to deepen liquidity in African sovereign fixed income markets.
MOBILIST's participation is intended to play a catalytic role by supporting the Fund's launch at a credible scale, helping establish liquidity in the Fund’s early stages.
Lee Collins, Head of Index Fixed Income, L&G: “We are pleased to launch the L&G LSF African Government Bond ETF, the first of its kind available in Europe. L&G is recognised for its expertise in managing Emerging Markets Debt assets and with this launch, we further expand the product suite in the asset class. This ETF offers investors the opportunity to increase their exposure to the region, which in a global portfolio is often underrepresented. It’s been a pleasure to work with the LSF and MOBILIST to bring this product to market and we thank them for their collaboration.”
Dr Vera Songwe, Founder & Chair of the LSF: “We are delighted to see the launch of the first ETF based on the iBoxx LSF USD African Sovereigns index. It illustrates the increasing appetite of the private sector for African securities. It is a privilege to work with leading partners to build momentum and attract a wider range of investors to Africa’s capital markets. I would like to express my gratitude to all partners and in particular Afreximbank whose support for the LSF's mission and objectives since inception has been instrumental in making this milestone possible and driving the international growth of African financial markets.”
Further information
Bradley Starr
Senior Communications Executive, Asset Management
Notes to editors
Established in 1836, L&G is one of the UK's leading financial services groups and a major global investor, with £1.2 trillion in total assets under management (as at FY25) of which c. 43% (c. £0.5 trillion) is international. We have a highly synergistic business model, which continues to drive strong returns. We are a leading player in Institutional Retirement, in Retail Savings and Protection, and in Asset Management through both public and private markets. Across the Group, we are committed to responsible investing and dedicated to serving the long-term savings and investment needs of customers and society.
L&G's Asset Management business is a major global investor across public and private markets, with £1.1 trillion in total assets under management (as at HY25) of which c. 43% (c. £0.5 trillion) is international. Our clients include individual savers, pension scheme members and global institutions.
We provide investment solutions from index-tracking and active funds to liquidity and liability-based risk management strategies.
Our investment philosophy and processes are focused on creating value over the long term. We believe that incorporating financially material sustainability criteria, when relevant to our clients, can create value and drive positive change. This reflects L&G’s purpose: ‘Investing for the long term. Our futures depend on it.