Legal & General Investment Management (LGIM) announced today the launch of the Future World ESG Index funds, a new suite of four ESG equity index funds, aimed at providing investors with low-cost access to sustainable investing themes across a broad range of equity strategies.
Designed in collaboration with index engineering company Solactive, the new funds offer a broad selection of regional exposures across developed economies.
The suite includes the Legal & General Future World ESG Europe ex UK Index Fund, Legal & General Future World ESG Japan Index Fund, Legal & General Future World ESG North America Index Fund, and Legal & General Future World ESG Asia Pacific Index Fund.
LGIM said that it expects to launch a fifth addition to the range, offering investors further exposure to emerging economies.
James Crossley, Head of UK Distribution at LGIM, said:
“The demand for low-cost ESG index funds will continue to grow as investors become increasingly concerned about the real impact of climate change. We believe that sustainable investing shouldn’t have to cost the earth and our Future World Equity ESG Index Funds range is priced at a highly competitive level. With 35 years of experience tracking indices and nearly 50 years of engagement with companies, peers and policy makers, we believe LGIM is well positioned to deliver index investment strategies that bring together our scale and responsible investing credentials.”
The new range tracks ESG indices which incorporate a carbon emissions reduction trajectory and an approach to sustainable investing, exclusions, ESG scoring and decarbonization considerations. It is aimed at clients who want to express a conviction on responsible investing themes across a range of equity strategies. The wider Future World range combines a mixture of index tracker funds with investments across company shares, bonds and commercial property.
Managed by LGIM’s index teams, the funds aim to track their respective LGIM-designed benchmark indices which incorporate ESG considerations into the investment strategy. A shared ESG methodology across all the strategies means that the Funds can be used flexibly, for clients seeking specific targeted exposure or blended together to construct a low-cost tailored equity ESG solution.
Colm O’Brien, Head of Index, EMEA at LGIM, said:
“By partnering with Solactive and designing custom indices ourselves, we can deploy the intellectual property we have accrued as a leading provider of index funds. These funds track indices that apply a unique LGIM-enhanced ESG methodology. On top of sector exclusions, the index applies tilts based on proprietary LGIM calculated ESG scores, that are linked to our stewardship policies & engagement activities, across important Environmental, Social, & Governance topics. Additionally, we have ensured that these strategies are sensibly aligned to a Net Zero framework, including the introduction of a decarbonisation pathway that ensures the continued reduction in carbon emissions over time. This new exciting range of equity funds allows investors to seek to benefit from ESG integration & a net zero commitment while aiming to experience a similar risk return profile to traditional market cap strategies.”