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LGIMA launching ERI Scientific Beta Multi-factor commingled funds for institutional investors.

Dec 05 2016

The first institutional commingled fund offering using Scientific Beta Indices in North America

CHICAGO – December 5, 2016 – Legal & General Investment Management America, Inc. (“LGIMA”) announced that its US index fund management business will be launching Scientific Beta Multi-factor strategies using commingled funds designed for institutional investors such as defined benefit, defined contribution, Taft-Hartley and public plans.

"It’s a perfect marriage of LGIMA’s commingled fund platform that emphasizes a high level of governance, transparency and flexibility,” said Greg Behar, Head of Index Strategy at LGIMA. “This marks the first time that US investors will be able to access Scientific Beta’s academically-driven smart beta 2.0 methodology in a collective investment trust designed for institutional investors.” 

“We are delighted that LGIMA has chosen to launch an institutional commingled fund offering in North America that is based on ERI Scientific Beta indices,” said Noël Amenc, CEO of ERI Scientific Beta. “Our ambition is to serve North American asset owners with the most academically-proven and transparent smart factor and multi smart factor indices, and this new offering from LGIMA considerably expands the range of choices that institutional investors have at their disposal.”

LGIMA will be launching four funds - including the global, US, developed ex-US and emerging market components - of the Scientific Beta Multi-factor indices. These indices will initially have exposure to the low volatility, value, momentum and size factors and will use innovative weighting methodologies that seek to improve diversification and risk-adjusted returns relative to market-cap weighted indices.                                                                                                                                                                                                                                                                                                                                          

“At ERI Scientific Beta we have long been emphasizing the importance of diversifying the specific risks of factor indices,” said Amenc. “Diversification has been described as the only ‘free lunch’ in finance, and it is crucial that investors who wish to avoid the levels of concentration of cap-weighted indices do not fall into the trap of choosing highly-concentrated smart beta indices instead on the pretext of being as highly exposed to factors as possible.”

“LGIMA wanted to provide a plug-and-play factor exposure for clients,” said Behar. “The Scientific Beta methodology is one of the only index methodologies that allows for a modular component fund structure at both the factor and regional levels. The Scientific Beta commingled funds are an example of our commitment to working with our clients to bring new and innovative index investment opportunities across different capital markets.  At LGIMA, index investing is a core business strategy and success has been built by focusing on cost effective commingled funds that have a high level of transparency, flexibility and governance.“

MEDIA contact:

Name:  Audrey Belloff
Company: RF Binder
Email: [email protected]
Tel: 212 994 7547


ABOUT LGIMA:

Legal & General Investment Management America, Inc. (LGIMA) is a Chicago-based registered investment advisor specializing in active fixed income, liability driven investment (LDI) and index strategies for the US institutional market. LGIMA was founded in 2006 as a wholly-owned subsidiary of Legal & General Investment Management (Holdings) Ltd. (LGIM(H)), which also owns its affiliates Legal & General Investment Management Ltd. and LGIM International Ltd. Legal & General’s worldwide assets under management are approximately $765 billion.  In May 2014, LGIMA became a wholly owned subsidiary of Legal & General Investment Management US (Holdings), Inc. (LGIMUS(H)) which is wholly owned by LGIM(H).

ABOUT ERI SCIENTIFIC BETA:

EDHEC-Risk Institute, one of the top academic institutions in the field of fundamental and applied research for the investment industry, which itself is part of EDHEC Business School, a not-for-profit organization, set up ERI Scientific Beta in December 2012 as part of its policy of transferring know-how to the industry. ERI Scientific Beta is an original initiative which aims to favour the adoption of the latest advances in “smart beta” design and implementation by the whole investment industry. Its academic origin provides the foundation for its strategy: offer, in the best economic conditions possible, the smart beta solutions that are most proven scientifically with full transparency of both the methods and the associated risks. Smart beta is an approach that deviates from the default solution for indexing or benchmarking of using market capitalization as the sole criterion for weighting and constituent selection. ERI Scientific Beta provides worldwide client servicing through its offices in Boston, London, Nice, Singapore and Tokyo. As of June 30, 2016, the Scientific Beta indices corresponded to USD 10.3bn in assets under replication. ERI Scientific Beta has a dedicated team of 45 people who cover not only client support from Nice, Singapore and Boston, but also the development, production and promotion of its index offering.


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