UK-based Legal & General Investments (L&GI) has launched 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.
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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."
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By GlobalDataLegal & 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).
