Legal & General Asset Management (“L&G”) has listed the L&G LSF African Government Bond (USD) UCITS ETF on the London Stock Exchange, giving investors access to US dollar-denominated bonds issued by sovereign African entities.
Article created by the editorial staff of ETFWorld.co.uk
Giancarlo Sandrin, Deputy Head of Wholesale Distribution Europe at L&G
Legal & General lists a USD-denominated African sovereign debt ETF, seeded by the UK’s FCDO through its Mobilist programme
The fund, which carries the ISIN IE000MJ79846 and a total expense ratio (TER) of 0.39%, tracks the iBoxx LSF USD African Sovereigns Index. Its launch was co-seeded by the UK Foreign, Commonwealth and Development Office (FCDO) through its Mobilist programme – the first time the FCDO has seeded an ETF.
Fund objective and structure
The investment objective of the L&G LSF African Government Bond (USD) UCITS ETF is to provide exposure to US dollar-denominated bonds issued by sovereign African entities. The fund is passively managed and aims to track the performance of the iBoxx LSF USD African Sovereigns Index.
The ETF may use derivatives for efficient portfolio management. It is classified as an Article 6 product under the Sustainable Finance Disclosure Regulation (SFDR), meaning it does not promote environmental or social characteristics and does not have a sustainable investment objective.
According to the fund documentation, the underlying index is designed to provide exposure to sovereign issuers domiciled in eligible African emerging markets and includes both investment grade and sub-investment grade bonds. Countries subject to certain European Union or United States financial sanctions are excluded, and the index applies minimum size, maturity and credit rating requirements to constituent bonds.
Index methodology
The iBoxx LSF USD African Sovereigns Index selects debt issuers that are sovereigns domiciled in one of the African countries listed in the Liquidity and Sustainability Facility’s (LSF) eligible collateral, and that are classified as an emerging market under the Markit Global Economic Development Classification Methodology.
Constituents must meet minimum size, maturity, credit quality and liquidity requirements. The index weights constituents by market value, with country weights capped to improve diversification across the African sovereign bond universe. It is reviewed and rebalanced monthly. Independent reporting on the fund’s launch confirms that the index was launched in 2024 and that the fund’s approach provides in-built diversification within African sovereign bonds, through explicit country caps and floors alongside the eligibility rules described above.
Listing details and market access
The ETF trades under the ticker LION. In addition to the London Stock Exchange, the fund has also been made available on Deutsche Börse Xetra and SIX Swiss Exchange, according to L&G’s own product disclosures. On Xetra, the fund trades under the ticker LION-DE.
Background: the FCDO’s Mobilist programme
The fund’s launch was supported by initial co-seeding from the UK Foreign, Commonwealth and Development Office through its Mobilist programme. This marks the first time the FCDO has seeded an exchange-traded fund. Mobilist is a UK government initiative designed to mobilise private investment into emerging and developing economies through public markets.
The Liquidity and Sustainability Facility (LSF), which developed the underlying index in partnership with L&G, aims to support the liquidity of African sovereign and corporate debt issuance, lower the cost of finance for African governments, and increase liquidity in African capital markets more broadly.
Market context
Independent coverage of the launch describes it as the first ETF of its kind available to European investors built specifically on the iBoxx LSF USD African Sovereigns Index framework, developed in partnership with the LSF. Reporting on the launch has framed it as part of a broader effort to widen investor access to African sovereign debt through listed, exchange-traded vehicles, rather than through unlisted or bespoke fixed income mandates.
Outlook
The fund’s monthly rebalancing schedule and country-weight caps are designed to manage concentration risk within a bond universe that spans both investment grade and sub-investment grade African sovereign issuers. As with other emerging and frontier market fixed income products, investors should weigh the yield and diversification potential of the asset class against the credit and currency risk associated with sub-investment grade sovereign debt
| Name | L&G LSF African Government Bond (USD) UCITS ETF |
| ISIN | IE000MJ79846 |
| SEDOL | BMWDT92 |
| Currency | GBX |
| Management Fee | 0.39% |
| Benchmark | iBoxx LSF USD African Sovereigns Index |
| Name | L&G LSF African Government Bond (USD) UCITS ETF |
| ISIN | IE000MJ79846 |
| SEDOL | BMWDT81 |
| Currency | USD |
| Management Fee | 0.39% |
| Benchmark | iBoxx LSF USD African Sovereigns Index |
Source: ETFWorld.co.uk
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