Asset manager Legal & General (L&G) has launched three new index funds —targeting equities, bonds, and infrastructure—to enhance diversification for UK and European investors.
The newly launched funds, L&G MSCI ACWI IMI Equity Index Fund, L&G Global Bond Multiverse Index Fund, and Legal & General Future World Infrastructure Index Fund, address growing concentration risks and rising investor demand for tailored exposure to global markets.
The L&G MSCI ACWI IMI Equity Index Fund is designed to track the MSCI ACWI IMI Equity Index, covering large, mid-, and small-cap equities globally. This approach seeks to mitigate concentration risks associated with conventional market-cap weighted indices, which have seen an increased dominance of US mega-cap stocks. By incorporating emerging markets and small-cap issuers, the fund aims to provide broader diversification.
For fixed-income investors, the L&G Global Bond Multiverse Index Fund tracks the Bloomberg Multiverse 500MM B3+ Custom Index. This benchmark blends global aggregate bonds with high-yield and emerging market local currency debt, offering enhanced diversification beyond traditional global fixed-income indices. The fund also integrates quality and liquidity considerations to ensure a balanced risk-return profile.
“Influencing” fund selection
The Legal & General Future World Infrastructure Index Fund focuses on climate-aware investments in listed infrastructure. It tracks the Solactive L&G Climate Enhanced Infrastructure Index, which prioritises companies demonstrating strong environmental performance. The fund includes firms from the utilities, transportation, and telecommunications sectors in developed markets and aligns with L&G’s Climate Impact Pledge, emphasising sustainability and carbon reduction.
With an initial 50% reduction in carbon intensity, the infrastructure fund aims to provide investors with diversified exposure to essential physical networks while promoting sustainability. It is targeted at UK wealth managers and financial advisers, offering the potential for uncorrelated returns in a changing economic landscape.
These new funds build on L&G’s expanding ICAV range, making them accessible to both wholesale and institutional investors across the UK and Europe.
Ben Cherrington, head of UK wholesale, asset management, L&G, said: “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.”
Howie Li, global head of index and ETFs, asset management, L&G, added: “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.”
