Solactive, in collaboration with Legal & General Investment Management (LGIM) and German investment expert Gerd Kommer, has announced the launch of the Solactive Gerd Kommer Multifactor Equity Index.
This index, built upon a multifactor optimisation strategy and a comprehensive global markets universe, aims to provide investors with exposure to the equity market in both developed and emerging countries as well as small-, medium- and large-caps. The Solactive Gerd Kommer index consists of around 5,000 stocks. The weights of stocks are tilted towards undervalued, more profitable and lower-capitalisation stocks.
Individual countries weights are determined as the average of their market capitalisation and economic output, i.e., gross domestic product. This combines the advantages of these two different weighting methods, particularly leading to a reduction in the “US concentration risk”. The ETF tracking the index targets German-speaking self-directed investors and, the firm writes, benefits from the brand Gerd Kommer as one of Germany’s most popular finance influencers and a strong advocate for passive and low-cost investing.
Timo Pfeiffer, CMO of Solactive, says: “We are delighted to collaborate with two prominent players in the market, LGIM and Gerd Kommer, to introduce this multifactor equity index. With LGIM’s established reputation as our long-term partner and the support of Gerd Kommer’s extensive audience and reach, this new product will become accessible to a broader range of investors, allowing them to diversify their portfolios and seize new investment opportunities.”
Gerd Kommer, says: “We are very pleased to have had Solactive and LGIM at our side in designing the index that our new ETF replicates. The index design incorporates a number of key insights taken from best practice in smart beta investing as well as from recent academic research. With this ETF an investor can conveniently implement the equity part of my “Weltportfolio concept” (Worldportfolio concept) in just one single product. I believe our ETF leads the pack when it comes to multifactor equity ETFs in the retail markets of Germany, Austria and Switzerland.”