Press releases

Legal & General Investments expands index range into global inflation linked bonds.

Simon Pistell - Managing Director, Legal & General Investments
Simon Pistell
Managing Director,
Legal & General Investments

28 August 2013

Simon Pistell - Managing Director, Legal & General Investments
Simon Pistell
Managing Director,
Legal & General Investments

Legal & General Investments (L&GI), one of the largest providers of retail index-tracking funds in the UK, today announces the launch of the Legal & General Global Inflation Linked Bond Index Fund, responding to advisers’ desire to diversify the fixed income element of client portfolios and insulate their investments from the effect of rising global inflation.

The Fund will be the latest addition to L&GI’s highly rated* index fund range offering investors simple, low-cost and effective ways to save and invest for the future.

The Legal & General Global Inflation Linked Bond Index Fund will track the Barclays World Government ex UK Inflation Linked Bond Index, which is comprised of inflation-linked bonds issued by governments from around the world, excluding the UK. To be included in the index, bonds must meet the minimum A- rating for countries in the G7 or eurozone or have a minimum AA- rating for other issuers, with bond returns linked to the local rate of inflation of each of the constituent countries.

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

“With the launch of this new fund, we are building on our commitment to offer simple, high quality and low cost funds to the retail market. L&GI has made it a priority to listen closely to customers and expand our range of market-leading index funds in order to offer the necessary building blocks with which they can construct diversified portfolios for their clients.

“Global inflation-linked bonds are a useful diversification tool for investors’ portfolios with a different return profile to conventional government bonds and a significantly lower duration than index-linked gilts, which will make up the majority of most investors’ inflation-linked allocation in the UK. They are also an excellent way for investors to provide part of their portfolio with a degree of inflation-proofing.”

Legal & General Investment Management’s Index Funds team will manage the Fund, with Tim Beaven the named Fund Manager. The team will manage the fund using its in-house expertise, focusing on close index-tracking, whilst looking to maximise returns and minimise portfolio costs. In order to remove return fluctuations due to currency, the fund will track a sterling-hedged index, with the portfolio hedging back to sterling in the same manner.

The new fund will provide a cost efficient way to invest in global inflation linked bonds with an annual management charge of just 0.20%.

Legal & General currently has £272 billion under management in index-tracking funds (as at 30 June 2013).

Notes to editors

The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.

The fund is being launched with an I unit class with both accumulation and income units available. The minimum investment is £1 million (although this may be waived on fund platforms).

The I unit class will have an annual management charge (AMC) of 0.20%. The ongoing charge figure (OCF) is estimated to be 0.25%. There is no initial service charge.

* Nine of Legal & General’s index funds are platinum graded by S&P Capital IQ, more than any other UK passive fund provider.

The Legal & General Group, established in 1836, is one of the UK’s leading financial services companies.  As at 30 June 2013, we were responsible for investing £433 billion worldwide on behalf of investors, policyholders and shareholders.  We also have over seven million customers in the UK for our life assurance, pensions, investments and general insurance plans.

The value of investments and any income taken may fall as well as rise, and investors may get back less than they invest. Past performance is not a guide to future performance. Exchange rate changes may cause the value of any overseas investments to rise or fall. This fund may invest more than 35% in securities issued by the US Government. Details of the specific and general risks associated with the funds mentioned are contained within the Key Investor Information documents.

Legal & General (Unit Trust Managers) Limited. Registered in England No. 1009418. Registered office: One Coleman Street, London EC2R 5AA. Authorised and regulated by the Financial Conduct Authority.

For more information please contact:

Kimberley Robinson

Kimberley Robinson
PR Manager Legal & General Group

t: +44 (0) 203 124 2092