Experienced Investor
LGIM launches multi-index income range
Legal & General Investment Management (LGIM) has announced the launch of a Multi-Index Income fund range, consisting of three risk-targeted multi-asset funds designed to generate income while maintaining appropriate levels of risk for advisers and clients over time.
The new range follows LGIM’s risk-targeted Multi-Index fund range, which recently surpassed £600m in assets under management.
The L&G Multi-Index Income 4, 5 and 6 funds are also risk-targeted, but aim to produce a greater proportion of total return from income, in comparison to the original L&G Multi-Index range. Income will be distributed on a monthly basis in the income class; an accumulation class is also available.
The L&G Multi-Index Income funds offer exposure to equities, bonds and direct property with an asset allocation bias towards income producing assets.
The lowest risk profile fund, Multi-Index Income 4, will seek a greater proportion of its income from sources such as fixed income, while the higher risk Multi-Index Income 5 and 6 funds will generate a greater proportion of their income from equities.
The L&G Multi-Index Income funds will gain exposure to markets primarily via L&G’s index tracking funds, alongside investment in active L&G funds and external income-focused ETFs.
The L&G Multi-Index Income fund range will be managed by the same team as the L&G Multi-Index range, with lead fund managers being Justin Onuekwusi and Andrzej Pioch, working alongside co-managers Bruce White and Martin Dietz.
The L&G Multi-Index 4, 5 and 6 funds have returned 11.52 per cent, 10.82 per cent and 9.44 per cent respectively between launch on 21 August 2013 and 30 September 2015.
“In this low-interest rate world, the industry has seen increasing demand for multi-asset income funds targeting high-yield levels,” said Justin Onuekwusi, lead fund manager of the L&G Multi-Index Income fund range.
“However, there are clear dangers that come with chasing income. Advisers are looking for greater certainty of risk over time on behalf of their clients, as the success of our Multi-Index range has proved.
“Rather than maximising income, we believe the focus should be on maximising total return for a given level of risk. Therefore, our Multi-Index Income funds do not target a specific yield, but bias sources of total return towards income producing assets while maintaining the suitability of risk profiles.”
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