LGIM targets AI, healthcare, clean water

Legal & General Investment Management (LGIM) has rolled out three thematic exchange-traded funds (ETFs) aimed at capturing investment opportunities in artificial intelligence, healthcare breakthroughs, and clean water.

The ETFs aim to invest in disruptive technologies and innovations in markets “experiencing the potential for rapid growth due to significant changes driven by technological advancements”, according to the firm.

“All sectors and businesses are being transformed by disruptive technology and we’re seeing increasing demand from investors looking to access these themes in a cost-efficient way,” said LGIM’s head of ETFs, Howie Li.

LGIM has developed “bespoke” indices using active research into these markets with experts from ROBO Global – the creator of a benchmark index tracking robotics and artificial intelligence – as well as Global Water Intelligence.

The L&G Artificial Intelligence, Healthcare Breakthrough, and Clean Water Ucits ETFs are already listed on the London Stock Exchange. The three funds add to the UK-based fund manager’s existing thematic ETFs offering, including the $904 million (€800 million) L&G Cyber Security Ucits ETF and $919 million L&G ROBO Global Robotics and Automation Ucits ETF.

Each of these latest funds offer investors direct exposure to each theme, LGIM has said. According to the firm, AI technologies could increase global GDP by $15.7 trillion over the next eleven years.

Meanwhile, the global healthcare industry is expected to be worth $8.7 trillion by next year. The Healthcare Breakthrough ETF will  be formed of companies leading the “digitalisation of the healthcare supply chain, advances in healthcare robotics and next-generation diagnostic tools”.

The asset manager also highlighted the issue of water scarcity in coming years. By 2025, it said, 1.8 billion people will be living in countries or regions with absolute water scarcity – “two thirds of the world’s population could be living under water-stressed conditions”.

The Clean Water fund will primarily focus on water management companies, “including those engaged in water production, processing and the provision of other related services”.

LGIM recently piled pressure on multinationals to address what it called a “climate emergency” with the release of its second annual ranking of climate change “leaders and laggards”.

Although this year’s results show improvements in the average scores across all sectors involved, many multinationals still fall short of meeting the requirements set out as part of LGIM’s Climate Impact Pledge.

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