The changes are effective from 1 November and will mean reductions of up to 55% apply to the ongoing charges figure (OCF). The reduced charges apply to the 'I' unit class of each fund, which refers to the nil commission or 'clean' priced units that are available on a wide range of intermediary platforms, says the company. The new charges also apply to direct intermediary deals that meet minimum investment levels.
The charges across the range are as follows:
LGIM has been offering retail index funds for 25 years and manages £16 billion across its range of retail index funds. Index funds currently represent just over 10% of all IMA retail mutual funds under management and LGIM says it believes that this will continue to grow significantly, reaching 19% by 2020. Overall LGIM manages £283 billion of index-tracking investments on behalf of investors.
Honor Solomon, head of retail distribution, EMEA, at Legal & General Investment Management said: "Index funds now account for 10% of all UK funds under management, and our experience with advisers suggests this will only grow further as they find more uses for trackers in client portfolios. Price is a key factor in the popularity of index funds and we are delighted to be able to bring to market a highly competitive set of new prices on a comprehensive range of asset classes.
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“What constitutes the best fit for an investor also includes factors like the size of the fund and its liquidity, the trading strategies used and counterparty risks, as well as how skilled the manager is overall in maximising returns through implementing index changes, corporate actions and dividend enhancement. Index funds are not all the same, and when you combine the new value we are delivering with our expertise and track record, I believe we are exceptionally well placed to continue to be a preferred partner for UK advisers.”