Legal & General Investments expands index range into short dated sterling corporate bonds.
15 May 2014
Legal & General Investments, one of the largest providers of retail index tracking funds in the UK, has launched the Legal & General Short Dated Sterling Corporate Bond Index Fund in response to investor demand for shorter maturity fixed income products.
The fund tracks the Markit iBoxx Sterling Corporates 1-5 Index, comprised of investment grade corporate bonds denominated in sterling that have a maturity of between one and five years.
Legal & General Investment Management’s Index Funds team will manage the fund, utilising its scale and in-house expertise to minimise transaction costs and maximise investor value.
It has an annual management charge of just 0.15% and it is planned that the fund will be made available through all major intermediary platforms.
Simon Pistell, Managing Director, Legal & General Investments (L&GI) commented:
“With the launch of this new fund, we are building on our commitment to offer simple, high quality and low cost index funds to the retail market. L&GI has made it a priority to listen closely to customers and their advisers 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.
“Investors are understandably concerned about the impact of rising interest rates on fixed income holdings and shorter maturity sterling corporate bonds can be used to reduce portfolio duration, providing a useful tool in managing the interest rate sensitivity of client holdings.”
Legal & General has £281 billion under management in index-tracking funds as at 31 December 2013 and manages £20.42 billion in sterling corporate bond index funds.
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 Legal & General Group, established in 1836, is one of the UK’s leading financial services companies. As at 31 December 2013, we were responsible for investing £452 billion worldwide on behalf of investors, policyholders and shareholders. We also had over 7.9 million customers in the UK for our life assurance, pensions, investments and general insurance plans.
- Legal & General is one of the biggest providers of index-tracking investments in the UK, managing £281 billion as at 31 December 2013.
- The value of investments and any income from them may fall as well as rise. Investors may get back less than they invest.
- Because the fund invests in bonds, investment returns may be sensitive to trends in interest rate movements and inflation. Fund values are likely to fall when interest rates rise. Such falls may be more pronounced in a low interest rate environment.
- The fund invests in bonds which are issued by companies. If these companies experience financial difficulty, they may be unable to pay back some or all of the interest, original investment or other payments that they owe. If this happens, the value of the fund may fall.
- This fund has investments that, rather than being traded on a stock exchange, are traded through brokers or investment banks matching buyers and sellers. In times of market uncertainty it may become less easy to buy and sell these investments. If this happens, the value of the fund may fall.
- We will take the ongoing charges from the fund’s capital rather than the fund’s income. This increases the amount of income that may be paid, but it reduces the growth potential and may lead to a fall in the value of the fund.
For more information please contact:
PR Manager Legal & General Group
t: +44 (0) 203 124 2092