It’s been a momentous time over at ETF Securities’s Canvas business, the UCITS ETF part of the firm that has been sold to Legal & General Investment Management.
Howie Li, CEO of Canvas for ETF Securities explains that the largest part of ETF Securities is going to WisdomTree, which has bought ETF Securities’s ETC business, but he and his team of 10 at Canvas are going to join LGIM, the UK’s biggest asset manager.
Li says: “We have known the LGIM team for a while now and we had positive discussions about the future of the business over much of 2017. We have an aligned vision and culture of how to build out an ETF business.”
Canvas is well-positioned to build new equity and fixed income ETFs, and LGIM has a huge indexing business but no ETFs. The deal allows them to enter the market immediately and plans are already afoot for new ETF products from Canvas.
Li says: “Under four years ago when we put the Canvas initiative into play, it had around USD450 million under management, then USD785 million in the following year. Since then, we’ve been on track to double the AUM each year and we are now within touching distance of USD3 billion.”
A big growth sector for the firm has been thematic equities, particularly robotics and automation with just over USD600 million in inflows this year, taking the total up to over USD1 billion and performance of around 50 per cent year to date.
“It’s very much the fact that the robotics and automation theme has lots of growth opportunities and we also have our partner in ROBO Global alongside to identify the key drivers of growth going forward.”
Alongside robotics, cybersecurity has also been very popular for the firm with the fund growing from around USD75 million last year and now at around USD345 million. “Cybersecurity is key to everything going forward,” Li says. “Our future world needs data and that data needs to be protected. We’re looking forward to being part of Legal & General to bring together key long-term thematic thinking in order to provide more investment opportunities that are align with those views .”
Looking forward, the Canvas team has been looking at the importance of green energy and the technological developments being made to store it efficiently. The team has also been analysing the e-commerce economy as well as breakthrough innovations in medicine.
“Impact and ESG investment is very much part of the landscape for LGIM as they are key drivers and thought leaders in that space,” Li says. “It will be important for us to view the world through that lens as we develop more solutions for investors.”