Legal & General Investment Management (LGIM) has taken a bold step to appeal to ethically-minded investors by excluding agriculture and livestock in its latest multi-strategy commodities ETF launch.
The new offering, L&G Multi-Strategy Enhanced Commodities ex-Agriculture & Livestock UCITS ETF (XAGR), follows the same methodology as its successful predecessor, the L&G Multi-Strategy Enhanced Commodities UCITS ETF (ENCO), but with a key difference – it excludes agriculture and livestock.
Ben Redmond, head of QIS structuring for EMEA at Barclays, explained that the exclusion of these sectors was a response to the demand expressed by certain investor types. Aanand Venkatramanan, head of ETFs at LGIM, further elaborated that some investors may choose to exclude these commodities based on their beliefs, particularly those concerned about the impact of food price speculation on global food security.
The XAGR ETF tracks a diversified range of commodities, including energy, precious metals, and industrial metals, while applying both seasonal and roll yield strategies to optimize returns. Venkatramanan highlighted the importance of recognizing the unique supply and demand dynamics of different commodities in managing the ETF effectively.
With a focus on ethical exclusions and sophisticated investment strategies, LGIM aims to replicate the success of its ENCO ETF, which has grown to $2 billion in assets under management in just over a year. By catering to investors looking for a more socially responsible approach to commodities investing, LGIM’s XAGR ETF offers a compelling option in the rapidly evolving landscape of ESG-focused investment products.
