Legal & General Investment Management has expanded its alternative non-market cap index offering with the launch of emerging market index fund that aims to reduce the impact of volatility typically associated with emerging market investing.
The LGIM Russell Developed Large Cap EM GeoExposure Index Fund is designed for investors who want to benefit from the economic growth expected in emerging markets, but without some of the risks involved in direct investment.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The new fund will track the Russell Developed Large Cap Emerging Market GeoExposure Index, which consists of large, developed market companies that either derive a material proportion of their revenues or generate significant total revenues from emerging markets.
LGIM believes this strategy will allow investors to gain a high exposure to emerging markets but with lower volatility and deeper liquidity typically associated with developed markets.
The new fund is designed for pension fund investors and institutional investors, with its seed investor, the Transport for London’s Pension Fund being the first investor in the fund, investing £150 million.
LGIM manages over £5 billion on behalf of its clients, after offering its first alternative strategy in 2006.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataSimon Midgen, head of index funds strategy, Legal & General Investment Management, said: "This is the first fund that we have developed that tracks a Russell index and expands our range of alternatively weighted index funds. We remain committed to developing funds and products to meet our clients’ needs and are pleased to have Transport for London’s Pension Fund as seed investors.
Scott Stark, managing director, Russell Indexes Europe, said: "We believe this new mandate helps underscore the growing role that alternative index-based investment strategies are playing alongside more traditional passive and active investment strategies in institutional client portfolios."
