Industry Updates

LGIM outflows mount as Paris-Aligned ETFs bleed assets

Investors have redeemed over $2bn from the group’s PAB ETFs year to date

Theo Andrew

Clean energy wind

Outflows from Legal and General Investment Management’s (LGIM) ETF have continued to mount this year as investors turn their back on ESG.

The asset manager has recorded $2.5bn outflows since the turn of the year, with investors redeeming $1.7bn from L&G US ESG Exclusions Paris Aligned UCITS ETF (RIUS) alone, as at 21 May, according to Bloomberg Intelligence data.

This was followed by the L&G Europe ESG Exclusions Emerging Markets Paris Aligned UCITS ETF (RIEU) which posted $365m outflows.

RIUS and RIEU now house $458m and $532m assets, respectively. It takes the total number of assets in LGIM's ETFs to $13.9bn AUM.

It marks a tough start to the year for the UK giant and comes following a dismal quarter for funds classified as Article 9 under the Sustainable Finance Disclosure Regulation (SFDR).

Article 9 funds – both passive and active – recorded outflows of $4.3bn in Q1, according to Morningstar data, however, passive flows were actually in the black over the quarter.

While LGIM’s Paris-Aligned Benchmark (PAB) ETFs experienced the brunt of the outflows, LGIM’s thematic range also saw an asset exodus.

The $2.3bn L&G Cyber Security UCITS ETF (ISPY) – its largest ETF – has recorded $293m outflows.

Meanwhile, investors have pulled $140m and $124m from the L&G ROBO Global Robotics and Automation UCITS ETF (ROBO) and the L&G Battery Value-Chain UCITS ETF (BATT), respectively.

Bright spots in LGIM’s ETF range include the L&G India INR Government Bond UCITS ETF (TIGR), with inflows of $65m.

The AI boom also helped the L&G Artificial Intelligence UCITS EFT (AIAI) record $113m inflows while the L&G Gerd Kommer Multifactor Equity UCITS ETF (GERD) posted inflows of $94m.

The ETF has now gathered $222m assets since it launched in June last year as it looks to make itself a staple in German ETF savings plans.

The recent boost in commodities saw investors pour $167m into the L&G Multi-Strategy Enhanced Commodities UCITS ETF (ENCO).

The group has continued to expand its ETF range this year, launching the L&G Multi-Strategy Enhanced Commodities ex-Agriculture & Livestock UCITS ETF (XAGR) and the L&G Energy Transition Commodities UCITS ETF (ENTR) last month.

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