L&G Investments cuts index fund charges to UK advisers

Legal & General Investments has reaffirmed its commitment to the UK index fund market by cutting charges on a number of its index funds by five basis points (0.05%), a reduction of up to 25% on the previous annual management charge.

Related topics:  Savings & Investments
Amy Loddington
8th April 2013
Savings & Investments
The cuts are part of a major and renewed focus by Legal & General Investments on its passive investment offering, as the Retail Distribution Review creates waves of new interest in index funds amongst UK advisers.

Effective today, the AMC for its single country and regional index funds is 0.15%, reduced from 0.20%. This includes the flagship UK equity index fund, the Legal & General UK Index Trust which has assets of £4.24 billion. The AMC for its core global index funds now stands at 0.25%, reduced from 0.30%. This includes the Legal & General Emerging Markets Government Bond Index Fund, which launched in November 2012 and was the first UK authorised index fund of its type.

The reduced charges apply to the ‘I' and ‘M' unit class of each fund, which refer to the nil commission or ‘clean' priced units that are available on a wide range of intermediary platforms. The new charges also apply to direct intermediary deals that meet minimum investment levels.

Legal & General has over 20 years' experience in providing high quality index tracking funds in the UK. It manages £243 billion in index assets as at 31 December 2012, which allows it to generate economies of scale for the benefit of its clients. Legal & General Investments has been awarded nine platinum fund gradings, which is more than any other UK index fund provider, by S&P Capital IQ in recognition of its expertise.

Simon Pistell, Managing Director, Legal & General Investments commented:

"Investors want good value funds. But they also want high quality products from a brand they know and trust, which are easy to understand and deliver on their objectives. This is about improving the value of our range whilst keeping our focus on simple, high quality and close-tracking index funds that are domiciled in the UK and invest in physical assets wherever possible. We're confident that UK advisers will find this combination very appealing in 2013.

"Interest in passive investing in the UK has steadily grown over the last two decades and 2013 could be a watershed moment. The Retail Distribution Review and shift to a fee-based advice environment has increased the pressure on advisers to offer greater value and reduce portfolio costs. Some are considering dipping their toes into index funds for the first time, and others are looking at new ways index funds can be used to construct portfolios.

"It's a priority for us to expand the reach of our index funds amongst these financial advisers this year. We'll be launching new products and maintaining our commitment to good value index funds combined with excellent service."
More like this
Latest from Property Reporter
Latest from Protection Reporter
CLOSE
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.