16 Nov 2020
16 Nov 2020
For Marketing Purposes
FOR QUALIFIED INVESTORS ONLY– This document is reserved and must be given in Switzerland exclusively to Qualified Investors as defined by the Swiss Collective Investment Scheme Act of 23 June 2006 (as amended from time to time, CISA).
Smart cities expert and author of “Smart Cities, Smart Mobility” Lukas Neckermann discusses how climate-conscious investing and the rapid development of smart cities are inextricably linked, and how the Covid 19 pandemic has accelerated the transition to green investments that will transform our ways of living.
The way cities are built plays a strong role in reducing the overall carbon footprint. Because urban dwellers tend to live in large, shared buildings, cities are the most efficient human environment. Beyond this, modern buildings in smart cities have better insulation levels, and some even have smart systems that detect when people are in their homes and offices that improve efficiency of heating and air conditioning. As a growing number of older buildings are being retrofitted and brought up to date, a smart city's energy use can be drastically reduced.
Smart cities are also a virtuous circle - they attract more people, more business and better employment opportunities, and also superior cultural and social experiences - which in turn makes them even more attractive. There is also an inherent link between smart cities and lower carbon emissions, because managing this growth puts cities at the front line of reducing greenhouse gas emissions.
Another part of this is the implementation of intelligent mobility and public transport solutions that reduce energy use. Shared and electrified transport systems produce lower emissions, and mean fewer people drive cars. In the smartest of cities, the carbon footprint is even lower thanks to truly smart mobility modes. These can be public transport, or efficiently organised multimodal combination of transport systems, from cars to trains, buses, and trams, through to bike sharing schemes and walking.
Covid has been a great accelerator, changing the way we work and interact. In response to the pandemic, we are all discovering online meetings as a viable alternative to at least some expensive and time-consuming business trips.
It obviously had a huge impact on the airline industry, with turnover in some cases plummeting up to 80% this year. On the flip side, investment is growing in companies that improve the connectivity we all rely on instead, such as fiber-optic broadband, high speed mobile, and the services that come with them. Then there are a number of services that have proved to be essential during Covid, and will also become essential to the development and quality of life of smart cities. During the spring lockdowns, companies like Uber, Grab and Lyft accelerated the expansion of their business models into food delivery, groceries, and even medical delivery. Companies adapting to change with new technologies and services has been a major impact of the coronavirus pandemic.
Investors are increasingly directing capital towards climate-oriented projects and assets. We're seeing a wave of institutional investors, from insurance and pension funds, to universities and sovereign wealth funds, reallocating funds to green projects and assets that are ESG graded, or compliant with the ambitions of the Paris Climate Agreement.
And as institutional investors move increasingly down this path, retail investors are following in their footsteps. This trend in the reallocation of capital is slowly eroding investor support for heavily-polluting industries, and shifting instead to the very technologies that make smart cities tick, namely renewables, electric vehicles and all the infrastructure that goes with them, such as EV charging stations, energy storage systems, even urban farming. There’s clearly a parallel between smart cities and climate-conscious investing.
Let me also mention the Social and Governance aspect of ESG investing, which is also central to the way smart cities work. Companies have recognised that if they don’t get this right, they won’t attract the investment, customers and talent they need to thrive. It’s urban consumers who are demanding change. They tend to be the most climate-conscious, but they are also concerned with how businesses can best serve their employees, as well as the community, whether it's the local urban community, or the global community, that they operate in.
In the long term, cities are going to recover from the Covid-19 crisis, and they will thrive. This will be supported by changing investment patterns that support greener, more efficient and better ways of living together. Ultimately, smart cities are the ones that attract people to work, to live, to play. And to do that, they’ll need to be climate-friendly.
Hear straight from Lukas as he equates smart cities to smart investing
Our world is changing. Technological breakthroughs, economic evolution and the climate emergency are reshaping reality for billions of people. Will your portfolio keep up?
Each of our Thematic ETFs combines human insight, natural language processing and data analysis techniques in a unique way to identify the companies that matter most, and ensure your portfolio stays one step ahead. 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.
This article 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 article. The opinions expressed by Lukas Neckermann are his own, and do not necessarily reflect the views of Lyxor International Asset Management or Societe Generale. Capital at risk. Please read our Risk Warning below.
This document has been provided by Lyxor International Asset Management that is solely responsible for its content.
LYXOR INDEX FUND - Lyxor MSCI Digital Economy ESG Filtered (DR) UCITS ETF - Acc, domiciled in Luxembourg, LYXOR INDEX FUND - Lyxor MSCI Millennials ESG Filtered (DR) UCITS ETF - Acc, domiciled in Luxembourg, LYXOR INDEX FUND - Lyxor MSCI Smart Cities ESG Filtered (DR) UCITS ETF - Acc, domiciled in Luxembourg, LYXOR INDEX FUND - Lyxor MSCI Disruptive Technology ESG Filtered (DR) UCITS ETF - Acc, domiciled in Luxembourg, LYXOR INDEX FUND - Lyxor MSCI Future Mobility ESG Filtered (DR) UCITS ETF - Acc, domiciled in Luxembourg, (Registered Funds) are collective investment schemes approved by the Swiss Financial Market Supervisory Authority FINMA (FINMA) as foreign collective investment schemes pursuant to article 120 of the Swiss Collective Investment Schemes Act of 23 June 2006 (as amended from time to time, CISA) for distribution in Switzerland to non-Qualified Investors as defined in the CISA. The above mentioned Exchange Trade Funds (ETFs) are listed on the SIX Swiss Exchange.
The shares are not registered under the U.S Securities Act of 1933 and may not be directly or indirectly offered or sold in the United States (including its territories or possessions) or to or for the benefit of a U.S Person (being a “United State Person” within the meaning of Regulation S under the Securities Act of 1933 of the United States, as amended, and/or any person not included in the definition of “Non-United States Person” within the meaning of Section 4.7 (a) (1) (iv) of the rules of the U.S. Commodity Futures Trading Commission.). No U.S federal or state securities commission has reviewed or approved this document and more generally any documents with respect to or in connection with the fund. Any representation to the contrary is a criminal offence.
Past performance is no indication of current or future performance. The performance data do not take into account of the commissions and costs incurred on the issue and redemption of units.
Financial intermediaries (including particularly, representatives of private banks or independent asset managers, Intermediaries) are hereby reminded on the strict regulatory requirements applicable under the CISA to any distribution of foreign collective investment schemes in Switzerland. It is each Intermediary’s sole responsibility to ensure that (i) all these requirements are put in place prior to any Intermediary distributing any of the Funds presented in this document and (ii) that otherwise, it does not take any action that could constitute distribution of collective investment schemes in Switzerland as defined in article 3 CISA and related regulation.
Any information in this document is given only as of the date of this document and is not updated as of any date thereafter.
This document is for information purposes only and does not constitute an offer, an invitation to make an offer, a solicitation or recommendation to invest in collective investment schemes. This document is not a prospectus as per article 652a or 1156 of the Swiss Code of Obligations, a listing prospectus according to the listing rules of the SIX Swiss Exchange or any other trading venue as defined by the Swiss Financial Market Infrastructure Act of 19 June 2015 (as amended from time to time, FMIA), a simplified prospectus, a key investor information document or a prospectus as defined in the CISA.
An investment in collective investment schemes involves significant risks that are described in each prospectus or offering memorandum. Each potential investor should read the entire prospectus or offering memorandum and should carefully consider the risk warnings and disclosures before making an investment decision.
Any benchmarks/indices cited in this document are provided for information purposes only.
This document is not the result of a financial analysis and therefore is not subject to the “Directive on the Independence of Financial Research” of the Swiss Bankers Association.
This document does not contain personalized recommendations or advice and is not intended to substitute any professional advice on investments in financial products.
The Representative and the Paying Agent of the Funds in Switzerland is Société Générale, Paris, Zurich Branch, Talacker 50, 8001 Zurich.
The prospectus or offering memorandum, the key investor information documents, the management regulation, the articles of association and/or any other constitutional documents as well as the annual and semi-annual financial reports may be obtained free of charge from the Representative in Switzerland.
In respect to the units/shares of the Funds distributed in and from Switzerland, place of performance and jurisdiction is at the registered office of the Representative in Switzerland.
Lyxor International Asset Management (“LIAM”) or its employees may have or maintain business relationships with companies covered in its research reports. As a result, investors should be aware that LIAM and its employees may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Please see appendix at the end of this report for the analyst(s) certification(s), important disclosures and disclaimers. Alternatively, visit our global research disclosure website www.lyxoretf.com/compliance.
Conflicts of interest
This research contains the views, opinions and recommendations of Lyxor International Asset Management (“LIAM”) Cross Asset and ETF research analysts and/or strategists. To the extent that this research contains trade ideas based on macro views of economic market conditions or relative value, it may differ from the fundamental Cross Asset and ETF Research opinions and recommendations contained in Cross Asset and ETF Research sector or company research reports and from the views and opinions of other departments of LIAM and its affiliates. Lyxor Cross Asset and ETF research analysts and/or strategists routinely consult with LIAM sales and portfolio management personnel regarding market information including, but not limited to, pricing, spread levels and trading activity of ETFs tracking equity, fixed income and commodity indices. Trading desks may trade, or have traded, as principal on the basis of the research analyst(s) views and reports. Lyxor has mandatory research policies and procedures that are reasonably designed to (i) ensure that purported facts in research reports are based on reliable information and (ii) to prevent improper selective or tiered dissemination of research reports. In addition, research analysts receive compensation based, in part, on the quality and accuracy of their analysis, client feedback, competitive factors and LIAM’s total revenues including revenues from management fees and investment advisory fees and distribution fees.