UK - Thematic ETFs

The future of investing starts here

Thematic ETFs

The future of investing starts here <ul><li>What opportunities do megatrends create for investors?</li><hr><li>How ETFs blending human insight, AI and big data can capture them</li><hr><li>Why these ETFs will evolve with the times</li></ul> Lyxor’s Thematic ETFs - March 2020 FOR PROFESSIONAL CLIENTS ONLY. CAPITAL AT RISK. This document is for the exclusive use of investors acting on their own account and categorised either as “Eligible Counterparties” or “Professional Clients” within the meaning of Markets in Financial Instruments Directive 2014/65/EU. It is not directed at retail clients.

Preparing for change

Preparing
for change

Our world is changing. Technological breakthroughs, evolutionary economic forces and the climate emergency are reshaping reality for billions of people.

The question is: will your portfolio keep up?

Lyxor has identified a series of investment themes we believe will be at the forefront of this new revolution. To access these most powerful of megatrends, we’ve partnered with data powerhouse MSCI and a board of leading industry experts to build an innovative range of thematic ETFs:

Smart Cities

Digital Economy

Future Mobility

Disruptive Technology

Millennials

Each of these ETFs combines human insight, cutting edge data science and Artificial Intelligence techniques in a unique way to identify the companies that matter most, and ensure your portfolio stays one step ahead. We use low cost indexing to help maximise your return. And we screen our holdings based on their ESG impact on the world around them.

As a pioneering ETF provider with a history of innovation, we’ve gone the extra mile to build some truly state-of-the-art funds for a new state of mind. We’re incredibly excited about this range and hope you can join us in preparing portfolios for change.

Chanchal Samadder
Head of Product Strategy, Lyxor ETF

In your opinion, which theme shows the greatest potential?

Smart Cities
Future Mobility
Digital Economy
Disruptive Technology
Millennials

The megatrends shaping our world

Megatrends are very real economic, social, technological and environmental forces reshaping the world as we know it. These long-term structural changes are undeniable, and backed by proven data.

Source for all data unless otherwise indicated: PWC, November 2016, https://www.pwc.com/gx/en/government-public-services/assets/five-megatrends-implications.pdf.
¹Source: United Nations, 2019, World Urbanization Prospects 2018: Highlights

Shift in global
economic power

Western economic dominance is waning

China and other “developing” countries are shifting from production to consumption economies

Emerging markets are increasingly exporters of capital and innovation

Demographic
& social change

Countries have different demographic trajectories

Some societies are ageing rapidly or even shrinking, limiting their workforce and straining healthcare systems

Other societies are young and growing, creating larger labour and consumer markets

Rapid
urbanisation

In the 1950s, 30% of the world lived in cities¹

Today, the figure is 55%, and is expected to reach 68% by 2050, requiring massive investment in smart infrastructure¹

The number of megacities (>10m inhabitants) is set to increase from 33 in 2018 to 43 by 2030¹

Technological breakthroughs

AI, automation, sensors and other frontiers of R&D are boosting productivity

New industries are being created, and old ones are being reshaped

Mobile technology, cloud computing, data analytics, the internet, and machine learning will keep transforming our world

Climate change & resource scarcity

Global warming, extreme weather and rising sea levels put traditional methods of farming and fishing under pressure

Resource scarcity is a critical issue, particularly clean water and energy

The need for sustainable solutions matters now more than ever

The world through a new lens

The new economy is redefining sectors and changing business models. Portfolios built around traditional sector definitions can be very constraining. Does a Financials allocation make the best of fintech? Or does the Industrials sector reflect the latest in robotics and AI innovation? Disruptive forces at play mean investors now have to look at the world differently than they might have before.

Traditional lens	Consumer goods	Telecoms	Energy	Healthcare	Financials	Industrials	Information tech	Utilities
Disruptive forces	Rise of Gen Y (+Gen Z)	Internet & social media	Renewables, lithium & battery tech	Med tech, higher longevity & healthy living	Software engineering	Robotics, AI & machine learning	Cloud computing & big data	Decentralised energy & smart energy
New lens	Millennial consumers	Comm. services	Clean energy	Digital health	Fintech	Automation	Internet of things	Smart grids

Source: Lyxor International Asset Management. For illustrative purposes only. This is not a recommendation.

Themes to consider

Smart Cities

Digital Economy

Future Mobility

Disruptive Technology

Millennials

In truth, we can’t say for sure which specific companies or technologies will take off. That’s why we’ve diversified each of our thematic exposures across a number of related concepts, products and services.

Future mobility for example isn’t just about electric cars – it’s about the whole value chain of autonomous vehicles, EV batteries and components, shared mobility, and the metals and mining companies supplying battery manufacturers.

Most themes overlap, converge and reinforce each other. For example, a bet on disruptive technologies is an indirect bet on the digital economy, artificial intelligence and more. That’s why some stocks appear in more than one of our thematic ETFs.

Bringing together man and machine

Thematic investing isn’t new – both active and passive managers have been doing it for years. While purely active or passive approaches come with benefits and drawbacks, we believe blending active oversight* with passive rules-based indexing combines the best of both worlds.

*MSCI may seek input from outside market experts on the ongoing evolution of the theme underlying the index, and relevant seed words. However, such input is advisory only in nature. Use of any such input is at MSCI’s discretion, and may or may not lead to a change to the index or index methodology.

Pros and cons of each approach

Purely active

Pros

Human quality control/sense check
Dynamic stock selection

Cons

Prone to human error/bias
Limited rigour
Higher management fees

Purely passive

Pros

Disciplined, rules-based approach
Can leverage big data
Cost-effective

Cons

Limited human quality control
Less dynamic portfolio

“Blended”

Pros

Benefits of active and passive combined
Inputs of index methodology evolve with time

But we don’t stop there…

Cons

Can still be prone to human error/bias

Adding a third pillar

Human oversight and expertise ensure your portfolio evolves with the theme. But there are thousands of companies in the world and it is virtually impossible to properly identify and analyse every single relevant stock using man power alone. In fact, we estimate that to thoroughly evaluate each and every one of the ~9,000 readily investible companies in the world, it would take about 180 years.* Even spread across a team of 100 dedicated analysts, it would still take close to two years!

That’s why in addition to seeking input from leading thematic experts**, we leverage big data and artificial intelligence to scan vast data sets in order to select the most relevant stocks. And by using low cost rules-based indexing, we aim to maximise your returns.

For illustrative purposes only. This is not a recommendation. *Calculation assumes one analyst researches the 9,072 companies of the MSCI ACWI Investable Market Index (IMI) index at a rate of 1 company per month, and assuming 8 hours per business day. **MSCI may seek input from outside market experts on the ongoing evolution of the theme underlying the index, and relevant seed words. However, such input is advisory only in nature. Use of any such input is at MSCI’s discretion, and may or may not lead to a change to the index or index methodology.

The human touch

We recognise that big data and AI isn’t infallible, which is exactly why MSCI have chosen a board of thematic experts who help ensure our ETFs won’t get left behind as themes evolve over time.*

These experts support MSCI with deep industry knowledge for each theme, and offer advice on how to keep the indices relevant and up to date, including removing and adding certain keywords used in the index methodology – more on that later.

*The MSCI index research team operates “inside the wall” at time of index launch, and at subsequent semi-annual/annual index reviews. The thematic experts operate “outside the wall” in an advisory capacity. After results of any rebalance have been publicly announced, the experts may then review the index constituents and advise the MSCI index research team as follows:

Feedback on stock additions and deletions
Suggestions on methodology amendments and enhancements
Recommendations on thematic seed words and keywords

Such input is advisory only in nature. Use of any such input is at MSCI’s discretion, and may or may not lead to a change to the index or index methodology.

Lukas Neckermann

Lukas is MD at Neckermann Strategic Advisors, a consultancy founded in 2013 focused on smart mobility and smart city strategy. He has 20 years of leadership experience in automotive and financial services, including roles at BMW and Allianz Group. Lukas was a founding member of TheOScarProject – the world’s first open-source car project – and is currently Advisor to four urban mobility startups: NEXT Future Transportation Inc., Flock, Splyt, and Eliport. Lukas is an Instructor in Strategy and Finance at New York University (NYU). He holds a Bachelor’s Degree in Science and Technology Studies from Cornell University, and an MBA from New York University’s Stern School of Business; he has written three books including “The Mobility Revolution” and “Smart Cities, Smart Mobility”.

Mikko Myrskylä

Mikko Myrskylä is Executive Director of the Max Planck Institute for Demographic Research (MPIDR) and Professor of Social Data Science at the University of Helsinki. He joined the MPIDR from the London School of Economics where he served as Professor of Demography. Professor Myrskylä holds a PhD in Demography from the University of Pennsylvania, and a PhD in Statistics from the University of Helsinki. His work focuses on population health, analysis of contemporary fertility trends, and demographic forecasting.

Costas Andriopoulos

Professor Costas Andriopoulos (BSc, MSc, PhD) is Professor of Innovation and Entrepreneurship, Director of Cass X (Research Centre for Innovation and Disruption) and the Associate Dean for Entrepreneurship at Cass Business School (City, University of London). He is also the Managing Director of Avyssos Advisors Ltd., an innovation management consultancy. Costas is internationally recognized for his work on organizational ambidexterity; how companies in high-velocity markets can excel at both incremental (exploiting current capabilities) and discontinuous (exploring into new space) innovation. His research, funded by the Carnegie Trust and European Commission among others, has been published in top-tier peer-reviewed academic and practitioner journals. Costas is an active business consultant, educator and advisor, working with CEOs and senior teams around the world.

Unlocking more with AI

Unlocking
more with AI

We built our ETFs with the aim to diversify across a number of sub-themes. This not only helps avoid concentration in a narrow set of areas and technologies, it also aims to capture the complete value chain of each theme. Taking digital economy as an example, this theme goes well beyond e-commerce – the full value chain also includes online payments, digital advertising, social media, cybersecurity and the sharing economy.

Because themes are forward-looking by nature, we find limited value in identifying relevant companies based on their historical data. Instead, we look to unconventional sources of non-financial data such as filings, news analyses and other media.

The power of keywords

So how can you ensure nothing is missed when investing in a theme? That’s where AI plays a role. Stock selection is based on a series of ‘seed words’ chosen by MSCI and the thematic experts. These are terms relevant to each theme, and are used to identify appropriate companies based on their business activities.

But scanning companies’ public records for those terms only takes you so far. By using AI techniques such as natural language processing, MSCI can identify a much broader set of relevant keywords. These are then used to better target the theme and its entire value chain.

Smart Cities example

‘Seed’ words²

Smart buildings
Smart homes
Smart Safety & Security
Smart Energy & Grids
Smart Mobility
Smart Waste/Water/Healthcare
Smart Inventory & Logistics
Smart Infra

*Application Programming Interface (e.g. extraction of relevant Wikipedia pages). **Term Frequency-Inverse Document Frequency (TF-IDF) measures the importance of a word in a document within a collection of documents (“corpus”). ***Word Embedding, a Natural Language Processing (NLP) technique, helps identify keywords contextually similar to the seed word.

Keyword extraction

Corpus generation
(via open-source search API)*

Word filtering
(TF-IDF)**

Contextual similarity
(Word Embedding)***

Fine tuning
(exclude generic words, add synonyms..)

Final derived keywords
from ‘Smart Infra’ seed word²

alleyway
cable car
escalator
fire service
modernization
pavement
rapid transit
subway car
subway train
urban development
urban renewal
walkway
smart city
intelligent city
smart energy
e service
smart community

²Source: MSCI, Lyxor International Asset Management, as at 29/05/2019. For illustrative purposes only.

Building an eligible stock universe

Using big data analysis, MSCI cross checks public records (e.g. corporate filings, annual reports) of all companies in the parent index – the MSCI ACWI IMI – for relevant key words defined in the previous step. Stock selection is based on two identifiers:

Directly through business segments, which describe specific parts of the companies’ overall activities (at least one relevant word is sufficient to be eligible)
Indirectly through summary descriptions, which summarise the companies’ main lines of business (at least two relevant words are sufficient to be eligible)

Smart Cities example³
Different scenarios for eligible universe inclusion

³Source: MSCI, Lyxor International Asset Management, as at 29/05/2019. For illustrative purposes only.

Staying relevant

Now that an eligible stock universe has been built based on keyword matching, an important quality control step takes place to make sure only the companies that matter make it into the thematic index.

Consider the case of Long Island Ice Tea Corp, and its now infamous rebranding to Long Blockchain Corp in 2017. After the name change, its share price soared overnight as speculative traders – and most likely algorithmic trading programs – piled in to capitalise on the crypto and blockchain trend. Over the following months, the share price came crashing down and the company was ultimately hit by a subpoena from the SEC.

To prevent such misleading anomalies from appearing in our funds, the index methodology carefully takes relevance into account.

To achieve this, MSCI makes use of four-digit SIC codes*, a granular and standardised way to identify a company’s business activities and associated revenues. A company’s SIC code is selected if it’s directly mapped to a relevant business segment (i.e. keyword hit), and if it’s assigned to business segments of at least two different companies in the eligible universe.

*Standard Industrial Classification (SIC) codes are assigned by the US government to business establishments to identify their primary business. Find out more here: https://siccode.com/page/what-is-a-sic-code MSCI sources raw business segment data from its data vendors. The raw segment data shows company’s business segments, revenue for each segment and segment’s SIC Code. MSCI’s data team then follows MSCI’s standard data quality validation process including dual vendor validation for each company’s segment data.

The relevance score

To make the cut for index inclusion, a company must derive between 25 and 100% of its revenue from activities relevant to the theme in question – i.e. a relevance score between 0.25 and 1.

Making use of SIC codes not only controls for relevance, but can also help identify other relevant segments and associated revenue that may have been missed by the initial keyword mapping.

Smart Cities example⁴

Working out the relevance score for an Asian mass transit operator

Controlling for false positives
Revenues derived from selected SIC codes that haven’t been directly mapped to a relevant segment are considered with a discount factor applied, as revenues attributed to such SIC codes can be prone to overestimation.

Segment names	SIC Codes	Revenue	Selected segment by keyword hit?	Selected SIC code?	Discount factor	Attributable revenue
Mass Transit System	4789	248,417,013.11	Yes	Yes	1.00	248,417,013.11
Media	7319	100,000,000.00	No	No	0.00	0.00
Services Business	4789	40,038,375.44	No	Yes	0.44	17,599,285.91
Property	6552	767,508.96	No	Yes	0.44	337,366.50
Total		389,222,897.35				266,353,665.52

⁴Source: MSCI, Lyxor International Asset Management, as at 29/05/2019. For illustrative purposes only.

Responsible and robust companies

To summarise, a targeted list of relevant keywords chosen by thematic experts and MSCI’s applied research team is further enriched and broadened using cutting edge AI. These expanded keywords are used to identify a broad universe of eligible companies. And only those companies with at the very least 25% of their revenues attributable to the theme are selected. But we do not stop there…

Responsible companies

At Lyxor, we recognise that large-scale responsible investing will be instrumental in building a more sustainable world. With a growing focus on sustainability criteria in investor portfolios – especially in a context of a real climate emergency – we decided to include an ESG filter in the index construction. It focuses on three ESG criteria:

Controversial business exclusions

UN Global Compact Violators, and/or companies involved in the following business activities are excluded from the selected universe: Controversial Weapons, Nuclear Weapons, Civilian Firearms, Tobacco, Thermal Coal and Oil Sands.

Companies involved in very severe business controversies

Based on MSCI’s ESG Controversies Methodology, companies with an ESG Controversy Score of 0 (‘Red Flag’ companies) are excluded, as are companies with a missing controversy score.

ESG Rating

Companies with an MSCI ESG rating of CCC – the worst possible score – are excluded, as are companies with a missing rating.

Once the ESG exclusions have been applied, and standard size and liquidity filters have been taken into account, the top 50% stocks as measured by their relevance scored are selected and equal-weighted, before moving on to the final step.

Robust
companies

Finally, we make sure our funds give higher weights to committed businesses with a track record of growing sales revenue, using capital efficiently, and investing for the future.

That’s why the final step of the process scores the remaining stocks according to three fundamental criteria:

% sales spent on R&D and capex
Return on Invested Capital
1-year sales growth

Each stock is then given a composite score – specifically, a standardised Z-score – which determines its final weight in the index.

Bringing it all together

Relevant, Responsible
and Robust

Our investment approach is uniform for our five thematic ETFs, from initial keyword generation to final index creation. By combining human expertise with data science and AI techniques, we confidently target companies relevant to each theme. We aim to build responsible funds by applying an ESG filter. And by giving the companies with superior fundamental scores larger weights in the index, you can take comfort in knowing your exposure is tilted towards the most robust companies.

Source: Lyxor International Asset Management, MSCI. For illustrative purposes only.

Continued on next page →

Source: Lyxor International Asset Management, MSCI. For illustrative purposes only. *Companies involved in the following businesses are excluded: Controversial Weapons, Nuclear Weapons, Civilian Firearms, Tobacco, Thermal Coal, Oil Sands. Companies involved in very severe business controversies as defined by the MSCI ESG Controversies Methodology are excluded. Companies not assessed by MSCI’s ESG Controversy Scores are excluded. **Securities in the top half of the ranked universe are eligible for inclusion in the final index. The final number of securities in the index is determined as: N= Minimum (Maximum (Securities in the top half of the ranked universe, 60), 250).

Stock cap: 15%
EM cap: ACWI IMI + 10%***
Semi-annual index review
Annual keyword review

Watch our video on
the next page 🡢

Source: Lyxor International Asset Management, MSCI. For illustrative purposes only. ***Only Emerging Markets from the following countries are eligible for the final portfolio: China, Taiwan, South Korea, South Africa, Brazil, Thailand, Malaysia and Mexico.

A look under the hood

What’s the end result? While we understand the desire to have a look at index back tests, we encourage you not to focus on past performance. These funds are based on ongoing megatrends continually shaping our future. On that basis, the underlying indices we developed with MSCI were constructed with a forwardlooking view in mind, not a backward-looking one.

How the indices have performed

Chart Source: Lyxor International Asset Management, Bloomberg. Period from 29/11/2013 (earliest available historical index data) to 28/02/2020. Performances of thematic indices are back tests and do not represent a live track record. Past performance is not a reliable indicator of future results. MSCI ACWI IMI Equal Weighted index used as a reference benchmark for a more like-for-like comparison, as the market cap weighted MSCI ACWI IMI index skews towards the largest companies.

Index name	MSCI ACWI IMI	MSCI ACWI IMI Equal Weighted	MSCI ACWI IMI Future Mobility ESG Filtered	MSCI ACWI IMI Millennials ESG Filtered	MSCI ACWI IMI Smart Cities ESG Filtered	MSCI ACWI IMI Disruptive Tech ESG Filtered	MSCI ACWI IMI Digital Economy ESG Filtered
Total Return* (%)	6.4	3.0	7.7	8.8	12.6	12.6	16.3
Total Risk (%)	11.7	12.6	20.3	13.2	15.3	17.8	17.3
Return/Risk	0.55	0.24	0.38	0.67	0.82	0.71	0.94
Sharpe Ratio	0.46	0.16	0.33	0.59	0.75	0.65	0.88
Active Return (%)	0.0	-3.4	1.2	2.3	6.1	6.2	9.9
Tracking Error (%)	0.0	3.6	11.2	5.2	8.0	10.3	10.8
Information Ratio	NaN	-0.93	0.11	0.45	0.77	0.60	0.91
Historical Beta	1.00	1.03	1.55	1.03	1.12	1.27	1.17
No of Stocks**	8662	8662	60	145	91	125	96
Price To Book**	2.1	1.5	2.3	3.4	2.9	4.2	4.8
Dividend Yield** (%)	2.4	2.3	1.6	1.4	1.4	0.6	0.5

Table Source: MSCI. Period from 29/11/2013 (earliest available index historical data) to 28/02/2020. Past performance is not a reliable indicator of future results. *Gross returns annualised in USD. **Monthly averages.

How ‘green’ are the exposures?

As a result of the ESG filtering process, and using the MSCI All Country World IMI Equal Weighted index as a reference benchmark, all five of the thematic indices have higher overall MSCI ESG scores, and have much stronger values-based metrics.

Index names	MSCI ACWI IMI	MSCI ACWI IMI Equal Weighted	MSCI ACWI IMI Future Mobility ESG Filtered	MSCI ACWI IMI Millennials ESG Filtered	MSCI ACWI IMI Smart Cities ESG Filtered	MSCI ACWI IMI Disruptive Tech ESG Filtered	MSCI ACWI IMI Digital Economy ESG Filtered
Integration
Key Integration Metrics
ESG Score	5.8	4.6	5.2	5.3	4.6	4.7	4.9
ESG Leaders (AAA-AA) (%)	25.0	10.4	11.9	18.2	9.3	9.3	13.2
ESG Laggards (B-CCC) (%)	9.1	20.3	18.2	12.9	19.1	18.6	18.5
ESG Trend Positive (%)	12.6	10.4	15.5	11.9	12.6	9.8	15.4
ESG Negative (%)	4.7	4.2	16.0	6.0	7.1	4.8	4.8
Index ESG Rating	A	BB	BB	BBB	BB	BB	BBB
ESG Pillars
Environmental Pillar Score	5.4	4.4	4.8	4.3	4.5	5.6	4.4
Social Score	4.8	4.5	4.3	4.7	4.9	4.4	4.4
Governance Score	5.3	5.1	5.3	5.3	5.1	5.0	5.2
Key Governance Metrics
Board Independence (Wtd Avg %)	75.0	65.7	68.7	68.2	67.9	74.9	68.6
Female Directors (Wtd Avg %)	26.2	18.7	17.7	22.1	19.4	20.0	21.3
Deviation from One Share One Vote (%)	23.7	18.1	10.6	21.8	14.2	10.3	21.5
Values
Tobacco Producers (%)	1.0	0.5	0.0	0.0	0.0	0.0	0.0
Civilian Firearms Producers (%)	0.2	0.1	0.0	0.0	0.0	0.0	0.0
Ties to Controversial Weapons (%)	0.7	0.2	0.0	0.0	0.0	0.0	0.0
Global Compact Compliance Violation/Watch List (%)	1.7	0.3	0.0	0.0	0.0	0.0	0.0
Red Flag Controversies (%)	2.4	0.3	0.0	0.0	0.0	0.0	0.0
Orange Flag Controversies (%)	22.9	3.6	5.7	0.9	0.9	2.6	2.1

Table Source: MSCI, as at 28/02/2020. MSCI ACWI IMI Equal Weighted index used as a reference benchmark for a more like-for-like comparison, as the market cap weighted MSCI ACWI IMI index skews towards the largest companies

Why we
trust MSCI

As a recognised leader in both ESG research and indexing, we have total confidence in MSCI’s capabilities in building these indices and excluding low performing companies based on ESG criteria.

MSCI’s ESG and indexing capabilities are:

Recognised by the biggest ETF providers in the world
Trusted by 99 out of the top 100 largest money managers⁵
Used by passive and active managers alike

⁵Source: P&I ranking, as at May 2019.

MSCI ESG Research

Key figures

200+

dedicated ESG analysts⁶

40+

years’ experience collecting, cleaning and standardising ESG data⁶

7,500+

companies rated (13,500 total issuers including subsidiaries)⁶

1,000+

ESG equity and fixed income indices use MSCI ESG data6⁶

⁶Source: MSCI ESG Research as of October 2019. Includes full time employees and allocated staff performing non-investment advisory tasks.

Why Lyxor for Thematic ETFs?

A pioneer in thematic investing since 2007

Innovative

We uniquely use cutting edge data science and AI techniques to identify relevant companies, leaving no stone unturned

Dynamic

Using thematic industry experts ensures our ETFs stay one step ahead as themes evolve over time

Sustainable

Stocks are screened to exclude controversial businesses, UN Global Compact violators, and companies with poor MSCI ESG Ratings

Dependable

Our expertise in thematic ETFs goes back to 2007 with the launch of our $750m+ World Water ETF⁷

Accomplished

Our $130m+ Robotics and AI ETF launched in 2018, leveraging the expertise of best-selling author and futurist Martin Ford⁷

⁷Source: Lyxor International Asset Management, as at 09/03/2020.

Our Thematic range at a glance

ETF name	Replication type	Bloomberg tickers	ISIN	^C^{urrent temporary TER}	Target TER⁸
Lyxor MSCI Smart Cities ESG Filtered (DR) UCITS ETF	Physical	IQCY, IQCT	LU2023679256	0.15%⁸	0.45%⁸
Lyxor MSCI Millennials ESG Filtered (DR) UCITS ETF	Physical	MILL, GENY	LU2023678449	0.15%⁸	0.45%⁸
Lyxor MSCI Future Mobility ESG Filtered (DR) UCITS ETF	Physical	ELCR, MOBI	LU2023679090	0.15%⁸	0.45%⁸
Lyxor MSCI Digital Economy ESG Filtered (DR) UCITS ETF Dynamic	Physical	EBUY, DIGE	LU2023678878	0.15%⁸	0.45%⁸
Lyxor MSCI Disruptive Technology ESG Filtered (DR) UCITS ETF	Physical	UNIC, DTEC	LU2023678282	0.15%⁸	0.45%⁸

⁸Source: Lyxor International Asset Management, as at 10/03/2020. Target TER is 0.45% but has temporarily been decreased to 0.15% until September 2021.

A note on investing in megatrends

Time horizons are long, and portfolios may be concentrated

This document is for informative purposes only, and should not be taken as investment advice. Lyxor ETF does not in any way endorse or promote the companies mentioned in this document.

Megatrends take time to shape the world; your investment horizon should be long term

Thematic indices are more narrow than traditional cap weighted indices
As a result of this increased concentration, volatility may be higher

Unconstrained by traditional allocations based on countries and sectors, thematic ETFs could be used as ‘satellites’ to strengthen the core of your equity portfolio

Risk warnings and important information:

Knowing your risk

Important information