Legal & General Investment Management (LGIM) has expanded its ETF range with the launch of a global brands strategy.
The L&G Global Brands UCITS ETF (LABL) is listed on the London Stock Exchange, Deutsche Boerse and Six Swiss Exchange with a total expense ratio (TER) of 0.39%.
The ETF tracks the Solactive BrandFinance Global Brands index which aims to invest in a “diversified portfolio” of the world’s most valuable brands.
It leverages the data from brand valuation consultancy which uses a framework to determine brand value based on five metrics comprising of brand equity, performance, impact, investment and forecast revenues.
Companies are then ranked by “aggregate brand value”, creating the Brand Finance Global 100 list which the index will then track.
The index will also incorporate liquidity, quality and ESG screens. A company's weighting will be capped at 5% in a bid to reduce portfolio concentration.
The ETF will be classified as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).
Aanand Venkatramanan (pictured), head of ETFs, EMEA at LGIM, commented: “From the phones in our pockets to the cars we drive, we are all familiar with brands and we have an instinctive grasp of their commercial value.
“We hope that the launch of this ETF will enable investors seeking exposure to such brands and companies that own them, gain access to a diversified portfolio of higher-quality names that have historically demonstrated greater earnings resilience.”
According to LGIM, companies within the 100 global brands list have, on average, exhibited 23% higher shareholder yield, 19% higher return on equity and 18% higher operating margin when compared to mega-cap peers in the MSCI World.
Richard Haigh, managing director at Brand Finance added: “A business’s brand is one of its most important financial assets. Used correctly, strong brands can unlock vast financial value for businesses and shareholders.
“Brand Finance is excited to partner with LGIM to launch this ETF and demonstrate the added value that brands bring. This will continue to reaffirm the role of brand in the boardroom.”
