Legal & General Investment Management (LGIM) has launched a range of core low-cost equity exchange traded funds (ETFs) as it expands the range of investment products available for Italian investors.
LGIM has redefined core equity market-cap ETFs through a new index design that can protect investors from unpredictable behaviour of crowded trading experienced by equity indices commonly tracked by most core ETFs.
According to the asset manager, the new core equity range will ensure investors are not forced to turn over their portfolio at the same time as the vast majority of core equity ETFs in the market where short-term price volatility frequently occurs. The risk from this volatility is increasing with the rise of index investing, which LGIM believes highlights the need for change.
The range of ETFs will also ensure companies in the portfolio meet minimum standards for best business practices in order to mitigate risks that may affect long-term investment performance. It is subject to the active scrutiny of LGIM's corporate governance team who engage with companies to create sustainable long-term value for investors.
Solactive will manage and calculate the indices designed and used by LGIM's core equity ETFs.
Howie Li, head of ETFs at Legal & General IM, said: "Index managers need to be more active in mitigating the risks of crowded indices and engaging with companies for the long-term benefit of the market and investors. We have designed our range of core ETFs with these principles in mind, taking steps to promote long-term performance and stability."
Giancarlo Sandrin, Country Head Italy, Wholesale & Retail at LGIM added: "Italy represents the fastest growing European retail market for ETFs and the compound annual growth rate in Italian assets under management in the ETF sector is almost double that of other European markets, presenting an excellent opportunity for us. Our status as one of the largest index fund managers in the world and our investment expertise lend us an important advantage in a competitive market like the Italian one, where we are able to offer not only passive solutions through ETFs and index funds but also active instruments, providing Italian investors with a comprehensive range of investment solutions".
LGIM launched its retail businesses in Italy in December 2018, as part of its European expansion plans and building on its existing presence for institutional clients. It will offer retail investors access to its full range of investment solutions, available within ETFs, SICAVs and ICAV Ucits schemes.