LBRTY®

The problem

Autocracy risk is rising, yet most equity benchmarks still embed direct country exposure and — more importantly — indirect stock-level economic ties to authoritarian regimes. Simple country exclusions leave most of that risk intact.

TOBAM thesis

Investing in democracy and civil liberties is not only a values choice: TOBAM’s motivation is risk-reward. LBRTY® excludes countries lacking basic civil liberties and democratic rights, and within eligible countries favours stocks lowly exposed to authoritarian economies — aiming to reduce autocracy exposure by a substantially larger ratio than exclusion alone.

How it works

1. 1

   Country layer: exclude jurisdictions lacking basic civil liberties and democratic rights.

2. 2

   Stock layer: within eligible markets, tilt toward companies with lower economic exposure to authoritarian regimes.

3. 3

   Optimise under tracking-error constraints versus relevant universes (e.g. ACWI, ACWI ex-US, Emerging Markets, USA).

Evidence & research

TOBAM has published research on mitigating authoritarian exposure in institutional portfolios, including US-focused notes and public viewpoints on why democracy risk matters for long-term capital. LBRTY® indices cover All World, All World ex USA, Emerging Markets, and USA universes.

Vehicles & access

• LBRTY® equity strategies (long-only), SFDR Article 9
• Available across ACWI, ACWI ex-US, Emerging Markets and related universes
• Selected share classes available on TOBAMDirect
• LBRTY® index family for benchmarking and passive implementations

FAQ