LGIM launches the new ETF Energy Transition Commodities

Legal & General Investment Management has announced the launch of the first ETF Energy Transition Commodities, a product designed to offer investors exposure to a diversified basket of commodities related to the energy transition. The ETF is classified as Article 6 under the Sustainable Finance Disclosure Regulation and will be managed by the team of experts at LGIM.

Exposure to a diversified range of energy commodities

The ETF Energy Transition Commodities offers unique exposure to three key macro areas of the energy transition, through commodity futures. These areas include:

• Transition metals: metals necessary for the production, storage, and distribution of clean energy.
• Low carbon emission transition energy sources: such as natural gas and ethanol, which address the challenges of emissions in sectors difficult to decarbonize.
• Carbon pricing: activities aimed at imposing a cost on pollution, encouraging the transition to sustainable business models.

Expansion of LGIM's thematic ETF offering

This new ETF adds to a series of LGIM's thematic ETF solutions on energy and resources, which include the expansion of the range of commodity ETFs, such as the L&G All Commodities UCITS ETF, the L&G Longer Dated All Commodities UCITS ETF and the L&G Enhanced Commodities UCITS ETF. The company recognizes the growing demand from investors for solutions that offer low correlation to other asset classes, while allowing participation in opportunities in the real economy.

We are extremely excited to launch this innovative commodity ETF, offering investors a unique investment solution that allows them to seize the potential growth opportunities of the energy transition, while also enjoying protection from inflation and a low correlation with other asset classes. Just like the industrial revolution, the energy transition is a commodity story, but with different players. Compared to the current energy mix, we believe it is based on new inputs, currently underrepresented in commodity portfolios. This is why we have structured the ETF around transition metals and energy sources, along with defining a price for carbon dioxide emissions; so as to be ready to face the next phase of the story, with its challenges and opportunities.

Aanand Venkatramanan, Head of ETFs for LGIM's EMEA region

The ETF is aimed at a wholesale and institutional investor audience and will be listed in the United Kingdom, France, Germany, Italy, the Netherlands, Norway, Denmark, Sweden, Finland, Austria, Luxembourg, Switzerland and Spain. In addition, it will also be available in Singapore, but only for institutional investors.