We can give investors access to a unique and differentiated basket of stocks
Thematic investing provides exposure to companies that are innovative, disruptive and that provide us with solutions that were once unthinkable
How do you define what themes are?
As pioneers of thematic ETFs, LGIM defines themes as areas that are bringing about structural and foundational change to the way we work, live and operate in society. They are areas that are characterised by bringing about efficiency gains that were once unthinkable, higher growth rates and areas of innovation.
What themes are not is areas that don’t fit into existing sectors or regions, so end up being called a ‘theme’. From an investor’s standpoint, one needs to be careful when it comes to defining or identifying themes, and not fall into the trap of going into areas that are called themes simply because they don’t fit existing categories.
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Thematic ETFs give investors the opportunity to access high-growth areas and companies that are bringing about innovation and change to the way we live. However, it is important to be clear about how the themes have been defined.
Aanand Venkatramanan, Head of ETFs, EMEA, at Legal & General Investment Management, explains how investors can gain exposure to high-growth areas that may not be captured by traditional benchmarks.
INTRODUCTION | Video interview | defining themes | thematic ETFs | maximising benefits
thematic ETFs
defining themes
Video interview
INTRODUCTION
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Three
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Legal & General Investment Management’s Aanand Venkatramanan, Head of ETFs, EMEA, on how to get the best out of thematic investing
Why invest through thematic ETFs?
Firstly, thematic investing allows investors to gain access to areas that are growing because of differentiated drivers. Be it clean energy, battery technology, healthcare and pharma breakthroughs, water technology or artificial intelligence, each of these areas are having a profound impact on us as individuals and societies. Investing into themes provides us with an opportunity to gain access to those in a way that complements existing traditional exposures.
Secondly, thematic investing provides exposure to companies that are innovative, disruptive and that provide us with solutions that were once unthinkable. This is an opportunity to gain exposure to companies that are not necessarily captured by traditional benchmarks or traditional growth-oriented funds.
Thirdly, accessing themes through an ETF provides investors with an opportunity to gain access to those themes in a transparent and efficient manner, one that is systematic and where the selection is completely rules-based.
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The views expressed above are those of Legal & General Investment Management. This should not be taken as an invitation to invest in Legal & General investments.
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.
Legal & General Investment Management Limited. Registered in England and Wales No. 02091894. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 119272.
© 2022 Legal & General Investment Management Limited. All rights reserved. No part of this video may be reproduced in whole or in part without the prior written consent of Legal & General Investment Management Limited.
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How can you get the best from thematic ETFs?
The short answer to that question is thematic purity and diversification. That is where the investment approach becomes very important. Given that themes are in their early stages of evolution, it is difficult to identify companies that are engaged in those themes in a purely passive manner. We recognise that and have developed a proprietary approach that blends active, bottom-up research with actively designed investment strategies.
Through that unique approach, we can give investors access to a unique and differentiated basket of stocks that is focused and diversified and that tracks the theme as it evolves.
More about thematic ETFs
INTRODUCTION | Video interview | defining themes | thematic ETFs | maximising benefits
maximising benefits
thematic ETFs
defining themes
Video interview
INTRODUCTION
For professional clients only. Not to be distributed to retail clients. Capital at risk
Three Minutes With
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