Simon Pistell, managing director of investments at L&G, gave a clear indication the firm could soon be bringing more passive funds to the market, although he would not be drawn on specific details.
Speaking at a press briefing today (14 May), Dan Attwood, proposition manager for retail index funds at L&G, said investors are starting to look beyond the traditional passive allocation to a UK market tracker.
Money Management’s latest survey analysing the impact of cost on tracker funds shows there are 21 FTSE All-share tracker funds and 11 FTSE 100 trackers.
“Investors are broadening out their exposure to tracker funds,” he said. “Historically you have seen the UK, the US, the more developed emerging markets. You are now seeing more fixed-interest passive funds and investments into those.”
L&G recently launched a passively managed sterling corporate bond fund and an emerging markets government bond index fund.
Mr Attwood added that investors are becoming less concentrated in their fund selection.
“Very much we are seeing a greater diversification of demand for passive funds,” he said.
Investors are not particularly interested in funds focusing on very specific areas or regions, Mr Attwood added, preferring a broader approach.
“What I tend to see with our clients is they want a broad diversified exposure to regions, Europe of the US, rather than focusing on the micro,” he said.