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LGIM Expands its Thematic ETF Range – Launches Digital Payments ETF Tracking Solactive Index

The global adoption of smartphones and mobile internet paved the way for a universal mobile payment ecosystem coexisting alongside established ‘offline’ technologies such as physical credit cards. According to a report by GSMA, the number of registered mobile payment accounts grew by 12.7 percent globally to 1.21 billion accounts in 2020, and exceeding, for the first time, a daily transaction volume of over USD 2bn. The report expects the USD 3bn mark to be surpassed by 2022. A robust outlook for e-commerce and the adoption of digital technologies like open banking payment solutions provides the foundation for growth in the digital payment market. Legal & General Investment Management (LGIM) realized the vast potential in this development and expanded its broad thematic ETF offering with its new L&G Digital Payments UCITS ETF.

Using a dynamic designed investment strategy, which leverages real-time data on companies engaged in the digital payments value-chain as provided by Payments Cards & Mobile, the ETF delivers a specialised portfolio of companies. L&G’s digital payments ETF is based on LGIM’s design process to leverage expert proprietary datasets and active research, which is systematically and rules-based captured by the Solactive Digital Payments Index NTR (the underlying index).

The Solactive Digital Payments Index

The Solactive Digital Payments Index aims to track the performance of a basket of stocks of companies that are actively engaged in the digital payments industry and are expected to benefit from the acceleration and proliferation of digital payments. Eligible companies for the index are selected based on their role in the digital payments value-chain, classified through the following activities: issuing bank/card issuer, payment acquirer, payment gateway, payment processor, cardless payment service provider, and payment technology provider.

“Both widespread access to the internet and a high smartphone ownership rate are enabling a more seamless shopping experience for customers,” comments Dr. Axel Haus, Team Head Qualitative Research at Solactive. “The upside from these technologies may also potentially benefit business owners via sales growth, lower transaction costs, and higher transparency. LGIM’s Digital Payments UCITS ETF potentially benefits from the massive global development in mobile payment, a trend, which we expect to advance further.“

The L&G Digital Payments UCITS ETF [DPAY] started trading on the London Stock Exchange, Xetra, and Borsa Italiana on May 27th, 2021.