Investment strategy focuses on the growth potential of digital payment technologies and the global transition to a cashless economy
27 May 2021
Legal & General Investment Management (LGIM) today announces the launch of the L&G Digital Payments UCITS ETF (‘the Fund’), which provides investors with exposure to the significant growth potential of digital payment technologies, resulting from the global transition to a cashless economy.
Valued at $58 billion in 2020, the global digital payments market is expected to grow at a 19.4% compounded annual growth rate between 2021 to 20281. The L&G Digital Payments UCITS ETF gives thematic exposure to this growth potential, investing across payment acquirer and card issuers, payment gateways and processors, payment technology providers and card-less payment service providers.
The new Fund invests in companies with a minimum free float market capitalisation of $200 million and a minimum three-month average daily trading volume (ADTV) of $1 million, drawn from a dynamic universe of more than 150 companies engaged in the digital payments value-chain, leveraging the expertise of Payments Cards & Mobile, a research and consultancy specialist. Companies in the investible universe have their primary listing in Developed Markets, South Korea and / or Taiwan. A monthly review ensures that if any individual company exceeds 15% of the portfolio then the ETF will be reweighted back to equal weighting.
The ETF launch reflects the role of the digital technology in broadening global financial inclusion, while also supporting several of the UN Sustainable Development Goals (SDGs), including growing industry, innovation, and infrastructure, decent work and economic growth, and building sustainable cities and communities. According to the UN, digital financial services, such as digital payments, can help families save money, cope with shocks, and protect assets against risk, allow government transfers, wages, or pensions to efficiently reach those who need them most, help small retailers to increase their revenues, and fuel business models that expand access to low-cost financial services, potentially reaching another 1.6 billion people2.
The L&G Digital Payments UCITS ETF is listed on the London Stock Exchange, Deutsche Börse and Borsa Italiana. The Fund is categorised as article eight under the EU’s Sustainable Finance Disclosure Regulation (SFDR).
The fund is the latest addition to LGIM’s existing thematic range, taking it to 11 specialist funds, covering a number of disruptive technology themes, such as the $2.53 billion L&G Cyber Security UCITS ETF, the $772m L&G Battery Value-Chain UCITS ETF and $1.20 billion L&G ROBO Global Robotics and Automation UCITS ETF3.
Howie Li, Head of ETFs at LGIM: "The digital payments revolution offers significant growth potential, underpinned by secular, long-term dynamics including the global shift to e-commerce, greater adoption of smartphones in emerging markets and developing safe, secure online payments. Investing in this theme can give investors the opportunity to contribute to the global financial inclusion movement as we seek to meet the UN SDGs."
James Crossley, Head of UK Retail Sales at LGIM: "We are seeing sustained demand from investors for targeted exposure to the long-term, structural trends that are changing our world. The launch of the L&G Digital Payments UCITS ETF expands our successful thematic range, equipping our clients to gain access to the growth of the cashless economy through a highly liquid product."
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 a third is international. We also provide powerful asset origination capabilities. Together, these 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. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.
*at 31 Dec 2022
Legal & General Investment Management
Legal & General Investment Management is one of Europe’s largest asset managers and a major global investor, with total assets under management of £1.2 trillion1 ($1.4tn, €1.4tn, CHF 1.4tn). 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.
*at 31 Dec 2022
1LGIM internal data as at 31 December 2022. These figures include assets managed by LGIMA, an SEC Registered Investment Advisor. Data includes derivative positions.
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. For illustrative purposes only. Reference to a particular security is on a historical 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. Views expressed are of LGIM as at 3 January 2023.
IMPORTANT LEGAL NOTICE
In the European Economic Area, it is issued by LGIM Managers (Europe) Limited, authorised by the Central Bank of Ireland as a UCITS management company (pursuant to European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (S.I. No. 352 of 2011), as amended) and as an alternative investment fund manager with "top up" permissions which enable the firm to carry out certain additional MiFID investment services (pursuant to the European Union (Alternative Investment Fund Managers) Regulations 2013 (S.I. No. 257 of 2013), as amended). Registered in Ireland with the Companies Registration Office (No. 609677). Registered Office: 70 Sir John Rogerson's Quay, Dublin, 2, Ireland. Regulated by the Central Bank of Ireland (No. C173733).
LGIM Managers (Europe) Limited operates a branch network in the European Economic Area, which is subject to supervision by the Central Bank of Ireland. In Italy, the branch office of LGIM Managers (Europe) Limited is subject to limited supervision by the Commissione Nazionale per le società e la Borsa ("CONSOB") and is registered with Banca d'Italia (no. 23978.0) with registered office at Piazza della Repubblica 3, 20121 Milan, (Companies' Register no. MI - 2557936). In Germany, the branch office of LGIM Managers (Europe) Limited is subject to limited supervision by the German Federal Financial Supervisory Authority ("BaFin"). In the Netherlands, the branch office of LGIM Managers (Europe) Limited is subject to limited supervision by the Dutch Authority for the Financial Markets ("AFM") and it is included in the register held by the AFM and registered with the trade register of the Chamber of Commerce under number 74481231.Details about the full extent of our relevant authorisations and permissions are available from us upon request. For further information on our products (including the product prospectuses), please visit our website.