Legal and General Investment Management (LGIM) has launched the L&G Energy Transition Commodities UCITS ETF, which aims to capture the growth potential of “the next chapter of the global energy story”.
It targets three commodity groups that are crucial to the next stage of the energy transition – transition metals, lower-carbon transition energy sources, and carbon prices.
The fund will invest in 18 commodities in total, and the firm claims that 50% of its holdings are not typically found in traditional commodity portfolios. Many of its assets are being made available to UCITS investors for the first time, it said.
Legal and General head of ETFs, Aanand Venkatramanan, added: “Like the industrial revolution, the energy transition is a commodity story, but with a new cast of characters. Compared with today’s energy mix, we believe the energy transition is built on new inputs, which in our view are underrepresented in current commodity portfolios.
“This is why we built the ETF around transition metals, transition energy and carbon pricing; capturing the next phase of demand, and opportunity, in the story.”
See also: AVI launches open-ended version of AVI Global Trust
This new fund will join the group’s five pre-existing ETFs specialising in commodities. These include the Gold Mining, US Energy Infrastructure, Longer Dated All Commodities, All Commodities and Multi-Strategy Enhanced Commodities ETFs.
Steven de Vries, head of wholesale UK, Europe and Latin America at the firm, added: “Demand for strategies that provide inflation risk mitigation and uncorrelated market exposure has been significant of late, not least due to the macroeconomic backdrop.
“Overlay this with the uniqueness of the proposition the Energy Transition ETF presents, and this becomes a particularly compelling strategy.”
The L&G Energy Transition Commodities UCITS ETF will be available to both wholesale and institutional investors in the UK, and has been categorised as Article 6 under the Sustainable Finance Disclosure Regulation.
See also: Liontrust suffers £6.1bn net outflows and 11.5% AUM slide in full-year results
