Investments  

LGIM trackers target property and emerging market debt

Legal & General Investment Management has launched two new tracker funds investing in property and emerging market (EM) sovereigns.

The Legal & General Global Real Estate Dividend Index Fund track will replicate the FTSE EPRA/NAREIT Developed Dividend Plus Index.

It will provide exposure to global developed market property companies and Real Estate Investment Trusts and carries an ongoing fund charge of 0.20 per cent.

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The second fund, the Legal & General Emerging Markets Government Bond (Local Currency) Index Fund, tracks the JPMorgan GBI-EM Global Diversified Local Currency Index.

The fund, which has an ongoing fund charge of 0.35 per cent, aims to provide passive exposure to local currency-denominated emerging market debt.

The funds will be managed by the LGIM Index Funds Team which consists of 35 investment professionals based in London and manages £264bn for retail and institutional clients.

Both funds will be made available through all major intermediary platforms.

Provider view

Honor Solomon, head of retail distribution Europe, the Middle East and Africa at LGIM, said: “Advisers and wealth managers are increasingly looking to index funds as a straightforward means of consistently generating market returns across a range of asset classes while reducing overall portfolio costs.

“At LGIM we are committed to developing our award-winning retail index fund range. Our priority is to work in partnership with our clients and leverage LGIM’s scale and indexing expertise to launch products that meet their evolving investment needs.

“The new local currency Emerging Markets Government Bond and Global Real Estate Dividend Index Funds will provide simple, high-quality and cost-effective exposure to asset classes that have the potential to provide an attractive income and are increasingly important building blocks within diversified portfolios.”

Adviser view

Gretchen Betts, financial planner at Glamorgan-based Broadway Financial Planning, said: “A well diversified portfolio will always contain an element of property. Many investors who invested huge amounts in property got trapped once the property bubble burst in the past. Providers got stuck, mainly because they did not operate daily dealings property funds. The only concern I have on the property fund is it being a global Reit. One would want to do a full analysis of the global spread beforehand.”

She added: “Everybody is nervous about what is going on in emerging markets. The China issue is not something new but is one that has gone on for years. I am sure that the issue will correct itself. I think EM is something that you have to be invested in. You just have to be sure that you are not overly exposed in the area.

“L&G has an excellent record in holding tracker funds, which is reassuring to the investor.”

Charges

Ongoing charges figure of 0.20 per cent and 0.35 per cent for The Legal & General Global Real Estate Dividend Index Fund and the Legal & General Emerging Markets Government Bond (Local Currency) Index Fund respectively.