L&G cuts charges on tracker range

Legal & General Investments has cut the charges on five of its index funds to make its institutional share classes more competitive.

The annual management charge on the £1.45bn US index trust, £378m Japan index trust, £1.4bn European index trust and £784m Pacific index trust has been cut from 0.3 per cent to 0.2 per cent. The AMC on the £162.2m international index trust has been cut from 0.35 to 0.3 per cent.

The total expense ratios on all of L&G’s index funds have been reduced by between two and 12 basis points.

The changes apply to the institutional unit classes, which are available to fee-based advisers on a number of platforms.

Legal & General Investments managing director Simon Ellis says: “Over the ast two to three years, Legal & General Investments has experienced a strong increase in demand for its passive investments, notably from fee-based advisers.

“This review of the pricing structures means advisers will get a better deal when using our index funds to construct client portfolios.”

The change makes the firm more competitive in the passive investment area.

BlackRock’s BCIF index passive fund range has an AMC of 0.2 per cent for the institutional share class.

Vanguard has a range of index funds with annual charges of between 0.15 per cent and 0.55 per cent.

Evolve Financial Planning director Caroline Hawkesley says: “To cut cost down to this level, you can begin to compare L&G to the institutionally priced competitors. For the consumer, this low cost means an improvement in returns on investment.”