Alternative Investments/FinTech: LGIM Launches UCITS ETF Focused On Digital Payments

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The new ETF forms a part of LGIM’s thematic range.

The L&G Digital Payments UCITS ETF from Legal & General Investment Management (LGIM) gives investors the opportunity to profit from the significant growth potential of digital payment technologies. As a thematic play on this market, the new ETF invests in payment acquirer and card issuers, payment gateways and processors, payment technology providers, and card-less payment service providers. (ETF EXPRESS)

The digital payments revolution

The global digital payments market was valued at US$58 billion in 2020. This market is likely to grow at a CAGR of about 19.4% between 2021 and 2028.

The pandemic triggered a worldwide shift towards digital payments and online e-commerce which is likely to be irreversible. In addition, digitization supports global financial inclusion and also several UN Sustainable Development Goals (SDGs).

In the opinion of the UN, digital financial services can help the under-banked to save money, cope with shocks and receive government transfers, wages, or pensions quickly.

The above factors bolster the potential of digital payments and the investment opportunity inherent therein.

Howie Li, Head of ETFs at LGIM, says: “The digital payments revolution offers significant growth potential, underpinned by secular, long-term dynamics including the global shift to e-commerce, greater adoption of smartphones in emerging markets, and developing safe, secure online payments. Investing in this theme can give investors the opportunity to contribute to the global financial inclusion movement as we seek to meet the UN SDGs.”

James Crossley, Head of UK Retail Sales at LGIM, adds: “We are seeing sustained demand from investors for targeted exposure to the long-term, structural trends that are changing our world. The launch of the L&G Digital Payments UCITS ETF expands our successful thematic range, equipping our clients to gain access to the growth of the cashless economy through a highly liquid product.”

L&G Digital Payments UCITS ETF

The new fund will select investments from a dynamic universe of more than 150 companies engaged in digital payments and drawn from the territories of developed markets, South Korea and Taiwan.

Only companies with a minimum free-float market capitalization of US$ 200 million and a minimum three-month average daily trading volume of US$ 1 million will qualify for inclusion in the ETF.

The ETF is listed on the London Stock Exchange, Deutsche Börse and Borsa Italiana. The expense ratio of the ETF is 0.49%.

Related Story:   A New ‘Fund Of Thematic Funds’ From LGIM

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