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Efficient. Simple. Liquid. The increasing popularity of ETFs doesn’t come as a surprise. But is the sector at risk of overshooting the mark? This edition of inFocus looks at the raft of different options that have cropped up in the last while, including those dubbed ‘investment fluff’ by certain investors. As we look at an assortment of quirky, overlooked offerings, we ask whether providers are losing sight of the bigger picture – and whether there really is such a thing as being too niche.
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Digital assets have become popular among asset managers looking to diversify into a new market booming with potential.
Why digital assets matter
Politically oriented ETFs are accumulating buzz in the US, but will they ever catch on here?
Anyone for a Make America Great Again ETF?
The evolution of cybersecurity
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What to look out for in the generously expanding thematic ETF space.
Get with the theme
Digital assets like cryptocurrency or non-fungible tokens (NFTs) are game changers. In the past two years, more than a dozen crypto-linked ETFs have launched, tracking everything from the metaverse to bitcoin and blockchains. These have provided investors with an opportunity to add non-traditional assets to their portfolios, which are at the focus of financial and technological innovation. The crypto assets’ rising accessibility has been stimulating their demand and legitimising them within the investment universe. Vinter CEO Jacob Lindberg said that overwhelming support for thematic exchange-traded products (ETPs) and exchange-traded notes (ETNs) has opened up in the structured crypto products industry. ‘Thematic crypto strategies can offer a compelling narrative to stand out in the competitive landscape for issuers in contrast to single-asset crypto ETPs. In addition, institutional investors appreciate the more diversified and narrative-driven approach to adding crypto assets to their portfolios.’ An increase in institutional participation has led to growing conviction in the digital asset landscape. Today, digital assets are classed according to their purpose and functionality. And their expansion beyond the status of decentralised currencies has increased their investability and growth potential: diversifying with digital assets gives investors the opportunity to learn more about different cryptos and the projects behind them. ‘At ETC Group, we have a blockchain and digital assets thematic ETF (KOIN) which responds to an identified investor's need who wants to get exposure to price movements in bitcoin but without directly holding bitcoin or investing in a bitcoin ETP,’ said Bradley Duke, co-CEO and founder of ETC Group. ‘We, of course, have a large and highly liquid Physical Bitcoin ETP (BTCE), but many investors are more comfortable with the UCITS wrapper and equity exposure to companies in the sector. The correlation between KOIN and Bitcoin fluctuates around 0.7%.’
Jacob Lindberg CEO, Vinter
Thematic crypto strategies can offer a compelling narrative to stand out in the competitive landscape for issuers in contrast to single-asset crypto ETPs.
Step into the metaverse The metaverse is another thematic area where investors have shown much interest, said Duke. It may not be the mainstream, but investment opportunities are still available. ‘ETC Group listed Europe's first Metaverse UCITS ETF (METR) on the LSE. Its index is composed of companies with considerable focus on this growing phenomenon with providers of virtual reality and augmented reality hardware and software being boosted in its methodology,’ he said.
Though the metaverse is in relatively early stages of its growth curve, many investors believe it could be the next big investment that could reshape the world and support the core elements of our lives – from education to work, finance and entertainment. As we enter the new era, it is the right time to learn about this innovative space and begin to explore the opportunities within it. Digital assets are no longer a far-fetched area – cryptocurrencies and others are here to stay. And they can bring potential diversification benefits to a portfolio.
What is the metaverse, exactly? The metaverse is a virtual realm that imitates real life by using elements like augmented reality (AR) and digital currencies. The term is based on Neal Stephenson’s 1992 science-fiction novel Snow Crash, which envisions a world dominated by then-futuristic technologies.
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By Ridhima Sharma
in
focus:
ETFs
of taste
A matter
ETFs that focus on politically divisive topics like oil or clean energy have been around for years, but ones explicitly based on a political ideology are relatively new. A handful have hit the US market in the past five years. ‘In a polarised political climate, it seems investors are eager to align their investing approach with their political ideals,’ says Ryan Jackson, manager research analyst for passive strategies at Morningstar in Chicago. Political ETFs track indices based on liberal or conservative principles but do so in various ways. For example, Democratic Large-Cap Core ETF (DEMZ) tracks an index of S&P 500 companies whose corporate and executive giving goes at least 75% towards Democratic candidates, while American Conservative Values ETF (ACVF) excludes companies that threaten conservative beliefs like individual liberty, small government or patriotism. ‘The “how” behind each fund is different but almost all of them aim to turn a political view into an investment strategy,’ says Jackson.
Louisiana Salge Senior sustainability specialist, EQ Investors
Public spending on green infrastructure has been promised, but private capital can help accelerate the green transition
The performance of ‘left’ and ‘right’ ETFs have owed largely to their sector exposures. Conservative ETFs tend to have heavier exposure to energy, industrials and utilities – areas of the market that have performed well of late. Point Bridge GOP Stock Tracker ETF – ticker name MAGA, shorthand for Trump’s ‘Make America Great Again’ election slogan – is the top performer this year. It invests in 150 companies whose employees and political action committees are highly supportive of Republican candidates but its outperformance has been driven by large sector overweights to energy and utilities, which have benefitted from the spike in energy prices. In fact, in the first nine months of 2022 MAGA outperformed DEMZ by 13.5 percentage points. Conversely, DEMZ is significantly overweight the technology sector and would have thrived had it been around in 2019 or all of 2020 (it was launched in November that year). Morningstar points to the recent ebbs and flows from the energy sector as a good illustration of how ‘left’ and ‘right’ ETFs can excel at different times. From 2019 to 2020, the iShares Global Clean Energy ETF (ICLN), which some would consider ‘left’ because of its environmentally friendly approach, gained 247%, while Energy Select Sector SPDR ETF (XLE), arguably ‘right’ because of its fossil fuel-dominated portfolio, lost 25%. From 2021 to September 2022, the script flipped: ICLN and XLE posted returns of -32% and 105%, respectively.
Thus far, political ETFs are a US phenomenon. In Europe, the only thing that could be considered similar are ETFs that filter investments on Islamic or Catholic principles. Creating an ETF that focuses on one end of the political spectrum is arguably easier in the US than in Europe given the very well-established system of political lobbying by corporations in America. ‘I guess it’d be much easier in the US to identify which companies have given money to which political party and create a portfolio on that basis,’ says Jose Garcia-Zarate, associate director for passive strategies at Morningstar in Madrid. ‘In Europe, one may argue that ESG has a political dimension. Populist parties, certainly from the very right end of the spectrum, are not particularly ESG policy-friendly and so theoretically there could be a constituency for an anti-ESG ETF but I’ve yet to see one. ‘If an individual wants to invest on the assumption that supporting certain political principles or parties may be favourable to some companies or sectors, there are already many equity-sector ETFs that can be used to express such a view.’
So, do political ETFs have a future either here or in the US? For Morningstar’s Jackson, time will tell. But wealth managers on both sides of the Atlantic have made their minds up. Jeff Nauta, principal of Henrickson Nauta Wealth Advisors in Belmont, Michigan, points to their small size, typically $15-30m, and the closure of some early entrants. ‘Ultimately, whether a company embodies left-leaning or right-leaning policy priorities is not a major determinant of its future business success,’ he says. ‘As a wealth manager, I encourage my clients to vote; I discourage them from voting with their portfolio.’ And for Ben Yearsley, co-founder of Fairview Investing in Bristol, these ETFs are a fad that won’t catch in any meaningful way. ‘They are a bit of investment fluff with no real credible thesis behind them,’ he says. ‘It’s like the mid-noughties when there was talk of launching sin funds in response to a wave of ethical launches: a bit of fun, but no credibility. I won’t be wasting any time on these.’
Left or right?
Crossing the Atlantic
Crossing the Atlantic Thus far, political ETFs are a US phenomenon. In Europe, the only thing that could be considered similar are ETFs that filter investments on Islamic or Catholic principles. Creating an ETF that focuses on one end of the political spectrum is arguably easier in the US than in Europe given the very well-established system of political lobbying by corporations in America. ‘I guess it’d be much easier in the US to identify which companies have given money to which political party and create a portfolio on that basis,’ says Jose Garcia-Zarate, associate director for passive strategies at Morningstar in Madrid. ‘In Europe, one may argue that ESG has a political dimension. Populist parties, certainly from the very right end of the spectrum, are not particularly ESG policy-friendly and so theoretically there could be a constituency for an anti-ESG ETF but I’ve yet to see one. ‘If an individual wants to invest on the assumption that supporting certain political principles or parties may be favourable to some companies or sectors, there are already many equity-sector ETFs that can be used to express such a view.’
Waste of time
aLLOCATION to eQUITY sECTORS (gics), Multiple investments, 10/03/22
Information Technology
Financials
Consumer Staples
Healthcare
Communication Services
Consumer Discretionary
Industrials
Materials
Real Estate
Energy
Utilities
0.00
8.68
17.36
26.04
34.73
Democratic Large Cap Core EFT
Point Bridge America First ETF
By Jennifer Hill
Source: Morningstar, 10.03.22
ETF
Russell 1000 TR USD
Click to download the chart
It is far better to drive change from the inside by having open and honest conversations with senior management and the board than to walk away and immediately lose any leverage for change
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This assumes climate policies are introduced early and become gradually more stringent. Both physical and transition risks are relatively subdued
This assumes policies are introduced late, are delayed or are divergent across countries and sectors. There is a higher transition risk
Cimate policies are implemented in some jurisdictions but are insufficient to halt significant global warming. This results in greater physical risk from, for example, extreme flooding, which will seriously affect GDP
total social bonds market
Source: SEB
1 EJ = Energy of 1 quintillion joules Source: IIASA NGFS Climate Scenarios Database, MESSAGE model.
Primary energy (downscaled) - net zero 2050
Chile
Philippines
Nigeria
The thematic ETF universe has proliferated in recent years. In 2021, net inflows have seen $188bn (£169bn) flood in, dwarfing the previous year’s $139bn (£125bn), according to data by Morningstar. To add, the amount of thematic funds debuting in 2021 has more than doubled globally (589) compared with 2020 (271). On the face of it, these vehicles offer a low-cost, relatively liquid approach to capitalise on long-term megatrends. But the reality is not so simple. Not only do investors have to separate lasting trends from temporary fads, they also have to contend with the diverse ways these funds are constructed. Here are some of the themes investors favour when it comes to the crunch – and what key methodology and implementation factors they look for in this diverse universe.
Robotics ‘There are quite a few ETFs focused on this theme,’ says Lynn Hutchinson, head of passives at Charles Stanley. ‘We favour the L&G Global Robotics and Automation fund. In particular, we like the fact that the index uses the input of a committee, made up of industry experts, academics and entrepreneurs. ‘So there’s an active element – they have the on-the-ground knowledge to foresee coming trends. At 86 basis points the fund is a little more expensive than some other ETFs but that’s because of the active element.’
What to look out for in the generously expanding thematic ETF space
Clean water There are numerous water ETFs on the market. Hutchinson favours the L&G Clean Water ETF. ‘We feel this is different to most of the other global water ETFs. Most have a high weighting to utilities, but this one has only around 25% exposure based on revenues. We also like the fund’s relatively high exposure to small and mid-caps, and its active rebalancing process. ‘In line with the innovative approach, there’s a segment focused on digital technology-based companies that have exposure to the water theme. This is currently only around 10% of the portfolio, but we expect it to grow over time.’
Clean energy Hutchinson favours iShares Global Clean Energy, which invests in companies involved in clean energy production or the provision of clean energy equipment and technology from both developed and emerging markets. ‘The benchmark of this fund was recently expanded: it now has 97 holdings, and a low overlap with the major equity indices. The US accounts for 48% of its allocation, but it also has exposure to other regions. As you would expect, there is an ESG policy.’
Battery value chain The growth of electric vehicles and other technologies means there is an increased focus on battery innovation. In this area Hutchinson the L&G Battery Value Chain ETF, which tracks an index based on a basket of stocks including providers of electro chemical energy storage technologies, and mining companies that produce metals used to manufacture batteries. ‘The fund has a high growth factor, which has seen some volatility lately but we expect it to be a good long-term play. Its top country exposure is Japan, at around 21.5%, followed by the US at 20.7% and Australia at 13.5%.’
What sets you apart from other thematic ETF providers covering cybersecurity? We blend active research with actively designed investment strategies. When comparing our portfolios with peers, that definitely sets us apart in terms of unique exposures and the types of stocks that eventually come into our basket, because our processes are backed by data that no one else accesses. We believe the rigorous work we do to build our database bottom-up is unique as it ends up giving us differentiated portfolios.
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Important information Important Information: For professional clients only. Past performance is not a guide to the future. The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested. Views expressed are of LGIM as at 21/10/22. The Information in this document (a) is for information purposes only and we are not soliciting any action based on it, and (b) is not a recommendation to buy or sell securities or pursue a particular investment strategy; and (c) is not investment, legal, regulatory or tax advice. Legal & General Investment Management Limited. Registered in England and Wales No. 02091894. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 119272. In the European Economic Area, it is issued by LGIM Managers (Europe) Limited, authorised by the Central Bank of Ireland as a UCITS management company (pursuant to European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (S.I. No. 352 of 2011), as amended) and as an alternative investment fund manager pursuant to the European Union (Alternative Investment Managers) Regulations, 2013 (S.I. No 257 of 2013) with “top up” permissions which enable the firm to carry out certain additional MiFID investment services (pursuant to the European Union (Alternative InvestmentFund Managers) Regulations 2013 (S.I. No. 257 of 2013), as amended). Registered in Ireland with the Companies Registration Office (No. 609677). Registered Office: 70 Sir John Rogerson’s Quay, Dublin, 2, Ireland. Regulated by the Central Bank of Ireland (No. C173733). LGIM Managers (Europe) Limited operates a branch network in the European Economic Area, which is subject to supervision by the Central Bank of Ireland. In Italy, the branch office of LGIM Managers (Europe) Limited is subject to limited supervision by the Commissione Nazionale per le società e la Borsa (“CONSOB”) and is registered with Banca d’Italia (no. 23978.0) with registered office at Piazza della Repubblica 3, 20121 - Milano, (Companies’ Register no. MI - 2557936). In Germany, the branch office of LGIM Managers (Europe) Limited is subject to limited supervision by the German Federal Financial Supervisory Authority (“BaFin”). In the Netherlands, the branch office of LGIM Managers (Europe) Limited is subject to limited supervision by the Dutch Authority for the Financial Markets (“AFM“) and it is included in the register held by the AFM and registered with the trade register of the Chamber of Commerce under number 74481231.Details about the full extent of our relevant authorisations and permissions are available from us upon request. For further information on our products (including the product prospectuses), please visit our website. © 2022 Legal & General Investment Management Limited. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, without the written permission of the publishers.
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As it stands, the database calculates the impact our portfolio had in the calendar year 2019. We are in the process of rolling this analysis forward to calculate impact for the calendar year 2020, as each of our investee companies start to publish their annual earnings and sustainability reports. We expect to be able to report to clients on the 2020 impact of our portfolio by the end of June.
Once each of our investee companies publish their annual earnings and sustainability reports, we will be able to update our figures to reflect 2020.
How do you construct the portfolios of your funds in a way that allows for innovation? It’s a fairly systematic approach that’s done through an index. The underlying data that the index uses is actively researched, but we don’t employ discretion in terms of pulling out individual stocks. However, the active element is very important when it comes to designing investment strategies, because we are looking for those areas that will grow over the next decade or two. The interaction with companies and research analysts and so forth, is very important because we want to design the portfolio in such a way that the strategy can evolve as the theme evolves. The active research enables us to identify new companies entering the market or companies exiting the industry. We’re also able to identify newer segments so that if new sub-segments evolve we can work with our index providers to include that, as long as it is supportive of the investment objective.
Why is cybercrime growing so rapidly? What are its most common forms? Much of our everyday life is online, especially after the pandemic. But this means individuals, companies and even governments are increasingly exposed and vulnerable to the threat of cybercrime. For corporates, every industry is exposed to online threats, but the most prominent sectors recently identified have been technology and finance. Cyberattacks can take many different forms. A big one is ransomware, where hackers block access to an application or system, and refuse to release it unless a ransom is paid. This happened to the NHS in 2018 during the WannaCry attack, which reportedly cost £92m. Another form of attack is distributed denial of service (DDOS), where hackers bombard servers with unnecessary requests, preventing them from dealing with legitimate requests. There are also trojans, where hackers infiltrate code and place some malicious code there that ultimately extracts data. At an individual level, there’s a big increase in phishing, where individuals are targeted in order to steal user credentials and private data that criminals can then exploit. A very common example is the victim being directed to a fake website that has the same look and feel as an official one, such as gov.uk. The main point is that it comes in a variety of shapes and forms, and everyone is potentially vulnerable: there’s no one particular community, sector or firm that’s at risk or immune from this risk.
How do cybersecurity solutions providers try to stay ahead of the problem? Again, there are multiple facets to this. It’s constantly changing as technology develops. On the software side, a recent big evolution has been in response to the fact that so much information is now stored in the cloud. Users had to have protection, covering the ways they authenticate themselves and who can enter their accounts. And then cloud service providers had to build up their network security to ensure they only let in legitimate users. We’ve seen a number of companies providing solutions to security concerns here, and each one is very focused in a specific area. Sailpoint, for example, is focused on authentication and cloud compliance, while Zscaler’s emphasis is on web filtering, making sure the websites accessed from a firm aren’t prohibited and so forth.
How do you as an investor try to be at the forefront of the evolving landscape of cybersecurity solutions providers? We are constantly aiming to be at the forefront in this dynamic environment. Our flagship cybersecurity fund – L&G Cyber Security UCITS ETF – was the first European ETF focusing on this industry theme. It’s mostly focused on software and service providers. Recently, however, we have observed the growing need for hardware security, meaning the need for security features to be integrated into chips. A simple example would be that Windows 11 can’t be installed on laptops or PCs that are six or seven years old, because the processors don’t have the right level of encryption. And looking forwards, within two or three years, Windows 11 should be the standard, installed on most PCs – particularly within corporations. This means the need for secure microprocessors should increase. It’s an early-stage trend that we wanted to capture, but we didn’t want to change the investment profile of our existing fund. So we have created a new fund, L&G Emerging Cyber Security ESG Exclusions UCITS ETF, for investors who want early access. The focus will be on these emerging segments such as hardware security, blockchain-based encryption and security applications, and quantum computing based security applications.
How do you look at revenue purity? We have different thresholds within the fund. It’s a 50% threshold for growth-oriented companies, but for emerging segments it’s lower, because the adoption is just starting. So for those companies it’s around 10%.
Do you incorporate ESG in your processes? We integrate ESG across the board. We have exclusions incorporated into both the cybersecurity funds, covering areas such as coal, defence, oil and gas, nuclear power, alcohol handling, and adult entertainment. We have very low thresholds: under 5% of revenues are derived from these areas. ESG has become increasingly important in the past few years, and we want to ensure we are at the forefront in that aspect as well.
Cybercrime is an ever-evolving threat. Here is how fund management is tackling it
Every industry is exposed to online threats, but the most prominent sectors have been recently identified as technology and finance.
Key risks Past performance is not a guide to the future. The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested. For illustrative purposes only. Reference to a particular security is on a historic basis and does not mean that the security is currently held or will be held within an LGIM portfolio. The above information does not constitute a recommendation to buy or sell any security. The Fund invests in technology companies whose products may face rapid obsolescence due to technological developments and frequent new product introduction. Such companies may face unpredictable changes in growth rates, competition for the services of qualified personnel and intense domestic and international competition, including competition from foreign competitors with lower production costs. Such companies are heavily dependent on patent and intellectual property rights. The loss or impairment of these rights may adversely affect the profitability of these companies. Additionally, companies in the cyber security field may be the target of cyber-attacks themselves, which, if successful, could significantly or permanently damage a company’s reputation, financial condition and ability to conduct business in the future. As the Index includes micro, small and medium-sized publicly traded companies, the Fund is subject to the risk that such companies may be more vulnerable to adverse business or economic events and greater and more unpredictable price changes than larger companies or the stock market as a whole. Third party service providers (such as counterparties entering into FDIs with the Fund or the Company’s depositary) may go bankrupt and fail to pay money due to the Fund or return property belonging to the Fund. If the Index provider stops calculating the Index or if the Fund’s licence to track the Index is terminated, the Fund may have to be closed. It may not always be possible to buy and sell Shares on a stock exchange or at prices closely reflecting the NAV. There is no capital guarantee or protection on the value of the Fund. Investors can lose all the capital invested in the Fund. The fund may have underlying investments that are valued in currencies that are different from the currency of this share class, USD, in which case exchange rate fluctuations will impact the value of your investment. In addition, the return in the currency of this share class may be different to the return in your own currency. Please refer to the “Risk Factors” section of the Company’s Prospectus and the Fund Supplement. In addition, the below risks relate to the L&G Cyber Security ETF Fund. As the Index includes small and medium-sized publicly traded companies, the Fund is subject to the risk that such companies may be more vulnerable to adverse business or economic events and greater and more unpredictable price changes than larger companies or the stock market as a whole.
Head of ETFs, EMEA
David Hsu
Exchange-traded funds (ETFs) are widely considered to be one of the most efficient means of achieving exposure to financial markets. Used as building blocks for the construction of a balanced portfolio, they have the advantage of cost-effectiveness, with the compounding benefit of low charges, which can make a valuable contribution to returns over the long term. What is more, their simple structure and transparent investment methodology allow investors to calibrate their volatility and return expectations more easily. But successful ETF investing is not about going to the shelf and simply picking the first option you see. It’s about understanding that each is only as good as the underlying index that it seeks to track. Let’s take a look at the must-have features of an ETF index.
Are the constituents spread widely enough? The first question to ask is whether your ETF passes the diversification test. Are its underlying assets sufficiently spread to accurately reflect the index or market you are trying to replicate? If your chosen index is too concentrated, it could mean you fail to participate fully in any upside and, by the same token, it could cause you to suffer more than your fair share of pain in the downside. Investing in an ETF replicating 300 holdings should be no more expensive than investing in one that replicates 30. So why take the risk of leaving yourself under-diversified?
Are the assets easily traded? It is also important that your ETF’s underlying securities are liquid. Your expected return could be compromised if you invest in an index containing securities in which it is difficult or expensive to execute trades. Furthermore, if your chosen benchmark is too narrow – which is often the case with thematic and niche indices – you could run the risk of suddenly finding yourself with a materially different, and potentially diluted, portfolio to the one you originally intended to invest in. This is because the asset mix of indices consisting of a concentrated number of smaller, less-tradeable securities can often be skewed by the need to rebalance after large inflows of investor capital, often after a period of strong performance. And when these forced rebalances occur, it is worth remembering that you, as the investor, could be required to bear the additional costs.
Senior equity index and ETF product specialist
The choice and variety of indices in the market is almost overwhelming, while the quality is far from consistent. Successful ETF investing is not about going to the shelf and simply picking the first option you see – it’s about understanding that each is only as good as the underlying index that it seeks to track. Investors should consider a number of factors, including the diversification, liquidity and transparency of the ETF and its index.
Is there clarity over what is held? The final ‘must-have’ for an ETF is transparency. Having full clarity over an ETF’s underlying holdings is critical when it comes to achieving optimum diversification. But investors also require transparency with regard to methodology. Does the ETF operate under a clear set of rules and have a consistent process for handling index changes? There are also a number of other best practices that can help an index more accurately reflect the market it seeks to track. For example, adjusting for float – so the index represents the investable opportunity set available in the marketplace – is critical to producing an optimal benchmark, in our view. This is also true of taking a flexible approach to market capitalisation – in order to take into account the relative size of companies.
A decade of successful partnerships The success of Vanguard’s ETF range, which is now ten years old, has its foundation not only in the recognition of the importance of these principles but also in the partnering of trusted index providers. Vanguard only works with reliable, globally recognised providers who are aligned with our philosophy and offer only high-quality, objective, rules-based indices. We also see it as a two-way relationship, with multiple groups at Vanguard contributing to the process. In our view, it is important, for example, that portfolio management and trading teams work closely with index providers to ensure that they have the necessary data to manage the funds effectively and efficiently. We believe that the more high-quality input you provide, the more successful the outcome will be. The choice and variety of indices in the market is almost overwhelming, while the quality is far from consistent. It is therefore critical that investors first think carefully about what they are seeking from an index and then screen carefully against the three ‘must-have’ criteria.
Investment risk information The value of investments, and the income from them, may fall or rise and investors may get back less than they invested. ETF shares can be bought or sold only through a broker. Investing in ETFs entails stockbroker commission and a bid- offer spread which should be considered fully before investing.
Important information For professional investors only (as defined under the MiFID II Directive) investing for their own account (including management companies (fund of funds) and professional clients investing on behalf of their discretionary clients). In Switzerland for professional investors only. Not to be distributed to the public. The information contained in this document is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information in this document does not constitute legal, tax, or investment advice. You must not, therefore, rely on the content of this document when making any investment decisions. Issued in EEA by Vanguard Group (Ireland) Limited which is regulated in Ireland by the Central Bank of Ireland. Issued in Switzerland by Vanguard Investments Switzerland GmbH. Issued by Vanguard Asset Management, Limited which is authorised and regulated in the UK by the Financial Conduct Authority. © 2022 Vanguard Group (Ireland) Limited. All rights reserved. © 2022 Vanguard Investments Switzerland GmbH. All rights reserved. © 2022 Vanguard Asset Management, Limited. All rights reserved.
Investing in an ETF replicating 300 holdings should be no more expensive than investing in one that replicates 30. So why take the risk of leaving yourself under-diversified?
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We believe investing should be simple. That’s why every one of our ETFs is built the same way, using broad index exposures, physical replication and a strict governance framework. We’ve been doing it this way since we launched our first ETF back in 2001.
As one of the largest and longest-serving providers of ETFs in the world, our expertise, experience and scale help us drive value for investors. We have grown organically, continuously refining our approach and finding new ways to lower costs and improve performance. Our aim is simple - to create the highest-quality, lowest-cost core building blocks for your portfolios.
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