Legal & General (L&G) has today announced the launch of three new index funds to bolster its proposition for UK and European investors – the L&G MSCI ACWI IMI Equity Index Fund, the L&G Global Bond Multiverse Index Fund, and the Legal & General Future World Infrastructure Index Fund. These tailored solutions have been designed for investors looking for better diversification in a market where concentration risks are a big focus.
The L&G MSCI ACWI IMI Equity Index Fund aims to track the MSCI ACWI IMI Equity Index and provides broad exposure to large, mid, and small-cap global equities, covering approximately 99% of the global investible equity opportunity set. Conventional free-float developed market-cap weighted indices have seen an increase in the weight of US stocks, and particularly a handful of mega-caps, which has led to increasingly concentrated portfolios. This index gives greater flexibility through access to emerging markets and small cap issuers, helping to diversify investor portfolios and reduce concentration risk.
The L&G Global Bond Multiverse Index Fund provides diversified exposure to global fixed income markets, going beyond the well-known Global Aggregate index. It aims to track the Bloomberg Multiverse 500MM B3+ Custom Index, which combines the global aggregate universe with global high-yield assets and emerging market local currency debt. Along with additional quality and liquidity enhancements, the fund aims to offer a comprehensive solution for fixed income investors.
The Legal & General Future World Infrastructure Index Fund will invest in a wide range of listed infrastructure companies, tracking the performance of the Solactive L&G Climate Enhanced Infrastructure Index based on its proprietary Environmental (E) score, favouring those that perform well from an environmental perspective,on a net total return basis. The fund tracks a listed infrastructure universe created in partnership with the L&G’s specialist index team. This includes companies providing infrastructure services including, but not limited to, utilities (such as water utilities and energy utilities), transportation, and/or telecommunication networks and are incorporated, headquartered or which have their principal business activities in developed countries.
The fund aims to achieve a 50% initial reduction in carbon intensity and tilts to those companies exhibiting the strongest environmental credentials. It seeks to provide climate-aware exposure to global listed infrastructure, with the potential to bring diversification and growth to investor portfolios. The Fund will uphold L&G’s Climate Impact Pledge, engaging with the world’s largest companies to adapt their business models to meet global climate change goals.
Ben Cherrington, Head of UK Wholesale, Asset Management, L&G: “With concentration risk challenges for equity portfolios and pressures on inflation and bond yields, we have seen demand increase for more tailored exposures to both equity and credit markets. We have also witnessed an increasing investor interest in listed infrastructure, given the desire for better diversification and liquidity. We believe these three funds can offer clients custom index portfolios that satisfy these demands.”
The Legal & General Future World Infrastructure Index Fund will primarily target UK wealth managers and financial advisers, created to provide investors with access to a physical network of interrelated systems and facilities, while offering the benefits of diversification and potential uncorrelated returns. The L&G MSCI ACWI IMI Equity Index Fund and the L&G Global Bond Multiverse Index Fund will add to L&G’s wider ICAV range, and will therefore be available to both Wholesale and Institutional investors across the UK and Europe.
Howie Li, Global Head of Index and ETFs, Asset Management, L&G: “We are thrilled to be bolstering our index offering. These new equity and bond index funds offer investors tailored exposure to equities and a broad range of fixed income asset classes in an accessible wrapper. Infrastructure across the globe is the backbone of a strong economy and we believe that our Global Infrastructure Index Fund is well positioned for offering investors exposure to a listed asset class while being able to express a conviction on ESG themes.”
These new funds follow the recent launch of the L&G S&P 500 US Equal Weight Index Fund, which has seen considerable client interest with over £500m in flows since October 2024. The Index Fund Management team comprises 25 fund managers, supported by a team of analysts and has an average industry experience of 15 years, with management oversight provided by the Global Head of Index Funds. The team manages over 100 index funds with £507bn4 in assets under management.
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