Industry Updates

LGIM eyes multi-factor ETF launch with German investment firm

UK asset manager targeting the booming German retail market

Theo Andrew

a large stone structure with statues on top with Brandenburg Gate in the background

Legal and General Investment Management (LGIM) is intensifying its push into the German retail market as it eyes the launch of a co-branded multi-factor ETF with investment firm Gerd Kommer Invest.

The ETF will track global equities and will be launched “in due course”, an LGIM spokesperson said.

It comes as the UK giant recently entered a partnership with the Munich-based wealth manager which houses €720m assets under management (AUM).

The move will be seen as a concerted push into the German market currently in the grips of a self-directed client boom and widely tipped as the big growth area for ETFs within Europe.

BlackRock research estimates the number of people making monthly contributions to ETF saving plans in Germany is projected to hit 20 million by 2026, up from 4.9 million today.

“As an innovative provider of investment solutions, LGIM is always exploring opportunities to collaborate with third-party experts in different areas to provide value for its clients,” LGIM said.

“We have recently entered into a partnership with German investment management firm Gerd Kommer Invest, with a view to innovate in the ETF investment space and to launch a co-branded multi-factor global equities ETF in due course.”

The UK asset manager said the ETF will be backed by active research and investment strategy design, utilising Gerd Kommer’s “investment philosophy and market research”.

The wealth manager follows the investment strategy of Dr. Gerd Kommer, author of several books on self-directed investing, offering independent financial advice using exclusively index funds and ETFs.

LGIM is looking to build on the growth it has seen in its ETF business, with revenues tripling to $3.8m since it purchased Canvas in 2018, according to its latest set of financial results.

It added it was looking to expand its offering in “higher-margin product areas” such as thematic ETFs.

The firm launched four thematic ETFs in the second half of 2022 including the L&G Metaverse ESG Exclusions UCITS ETF (MTVR).

LGIM’s ETF range recorded inflows of $1.3bn in 2022, including investment from other LGIM multi-asset classes, down from $3.9bn the previous year.

Despite this, the asset manager saw the total AUM for its ETF business fall from $13.7bn in 2021 to $12.3bn last year due to the challenging market environment.

Earlier this month, LGIM announced a partnership with independent financial adviser Richmond Wealth, launching a range of six model portfolios which incorporate ETFs.

Featured in this article

Logo for Legal & General Investment Management