Legal & General Fund Review
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In this comprehensive review, we provide an independent assessment of the performance of the 448 funds managed by Legal & General (L&G), a global asset management powerhouse with over £1.1 trillion in assets under their management. We analyse the 1, 3, and 5 year performance and sector rankings of 357 L&G pension funds and 91 Legal & General ISA funds. Each fund is evaluated and assigned an overall performance rating, providing investors with a clear understanding of their respective performance. We also identify how some of L&G's top-performing funds have managed to deliver returns that more than double the sector average, showcasing their quality and management expertise. There are 91 Legal and General unit trust funds that have a sector classification. Our analysis of these 91 funds identified that 11 received a top performing 5 star performance rating, 4 funds warranted a 4 star performance rating and 23 had a modest 3 star rating. The remaining 53 funds had consistently underperformed within their sector and were awarded a poor performing 1 or 2 star rating. How Yodelar Rate Fund Performance From their extensive range of 357 pension funds, 87 were awarded with an impressive 4 or 5 star performance rating. However, more than half of their pension funds have a history of poor performance and rated as 1 or 2 star rating. Overall, the analysis identifies mixed performance from their fund range, with 54% of their funds consistently performing below the sector average. Yet despite underperformance from more than half of their fund range, we also highlight a number of standout L&G funds that have excelled, some of which have delivered returns more than double that of their peers for a fraction of the cost.
Legal & General Fund Performance
Best Legal & General Funds
With 102 funds that have consistently outperformed their sector peers, Legal and General have no shortage of quality funds for investors to choose from. Each of these funds can be identified in the full . Below we feature a small selection of the Legal and General best funds.
L&G Global 100 Index Trust
The L&G Global 100 Index Trust has consistently been one of the most compelling options for investors who seek broad global exposure and a cost-effective approach to investing in some of the world's largest and most successful companies. As a passive index-tracking fund, its primary objective is to replicate the performance of the FTSE Global 100 Index, which comprises the 100 largest companies by market capitalisation from developed and advanced emerging markets worldwide.
One of the key advantages of this fund is the diversification it provides. By tracking the FTSE Global 100 Index, investors gain exposure to a diverse range of regions, sectors, and industries, which helps to mitigate the risks associated with investing in a single market or industry.
Another significant benefit of the Legal & General Global 100 Index Trust is its cost-efficiency. As an index-tracking fund, it does not require extensive research or active stock-picking efforts, which typically result in higher management fees and expenses. Instead, the fund aims to replicate the performance of the underlying index by investing in the same stocks and maintaining similar weightings.
Alongside the funds global exposure and low cost model is its consistently strong performance. The L&G Global 100 Index Trust has been one of the top performing global funds over the past 5 years with returns of 103.54% ranking an excellent 4th out of 379 funds in the IA Global sector.
Over a longer 10 year period the L&G Global 100 Index Trust has been equally impressive. The fund has 10 year returns of 279.22% compared to 157.09% for the sector average.
L&G Global Technology Index Trust
Technology funds have driven some of the largest gains in recent times and at the forefront of this sector is the L&G Global Technology Index Trust. This fund offers investors a simple, low-cost way to gain broad exposure to the global technology sector. As a passive index fund, it aims to track the performance of the FTSE World Technology Index by replicating its constituent holdings.
This index comprises over 400 of the world's leading technology companies across various sub-sectors like software, semiconductor equipment, IT services, computers, communications equipment and electronic components. Some of the major names include Apple, Microsoft, NVIDIA, Broadcom, Cisco Systems and Taiwan Semiconductor Manufacturing.
By investing in the L&G fund, investors get instant diversification across technology giants and innovative upstarts based in the U.S., Asia and other developed markets. Over the past 1, 3 and 5 year periods, it has generated total returns of 47.00%, 51.44% and 166.95% respectively as it efficiently captured the uptrend of technology stocks.
The funds exceptional performance goes beyond 5 years with the chart above showing 10 year returns of 665.79%.
Along with its strong performance, the fund's low ongoing charge of just 0.20% makes it one of the most attractive and cost-efficient options for UK investors to implement a technology tilt within their equity allocation.
L&G Ethical Pn
The L&G Ethical Pension fund was one of the early adopters of Ethical investing having incorporated an Ethical philosophy since its launch in 1999. Since then it has consistently been among Legal and Generals top performing pension funds delivering returns that have exceeded the sector averages across multiple time periods. Over the past year, the fund has generated an impressive 15.20% return, more than double the sector average of 6.18%. The fund achieved growth of 26.88% and 34.52% over the past three and five years, respectively, compared to the sector averages of 10.62% and 18.42%.
The fund's strong performance can in part be attributed to its ethical investment approach, which targets investing in companies within the FTSE 350 Index that prioritise environmental, social, and governance (ESG) factors.
Overall, the L&G Ethical Pension fund's impressive track record of outperformance positions it as an attractive option for investors seeking exposure to ethically-aligned investments while achieving strong long-term returns.
Poor Performing Legal & General Funds
As identified in our analysis some 55.7% of all Legal and General ISA and pension funds have consistently underperformed. Below we feature 3 funds that have been among their worst performers over the past 1, 3 & 5 years.
L&G Future World Sustainable UK Equity
The L&G Future World Sustainable UK Equity fund has consistently been one of the worst performing funds within the IA UK All Companies sector.
The fund's returns have been disappointing across various time periods. Over the past year, it delivered a meagre 1.11% return, significantly underperforming the sector average of 5.92%. More concerning are the fund's dismal longer-term returns, with a 3-year return of -17.95% and a 5-year return of -7.01%, compared to the sector averages of 8.55% and 20.97%, respectively.
The L&G Future World Sustainable UK Equity fund is an actively managed fund with holdings in between 30 and 60 companies on average over a typical market cycle of 3-5 years, which means the fund may be concentrated at times.
The fund’s poor returns are particularly disappointing given its annual charge of 0.78%, which is more than the 0.73% average across the IA UK All Companies sector.
L&G Future World Sustainable European Equity Focus
The L&G Future World Sustainable European Equity Focus fund has been a significant under-performer within the IA Europe Excluding UK sector, which comprises 135 funds. The fund's very poor performance over the past few years raises serious concerns about its investment strategy and execution.
The fund has posted a negative return of -2.21% over the past year, which is particularly disappointing considering the sector averaged growth of 8.85% for the period as European markets performed strongly. The fund's underperformance is not limited to recent times, it has consistently lagged behind its peers over the past several years. The fund's 5 year returns of 14.15% was in the bottom 4% of the sector with the sector average of 47.08% more than 3 times greater. The fund also has an annual charge of 0.81% which is also above the 0.73% average annual charge for the sector.
L&G Multi-Index 3 fund
The L&G Multi-Index 3 fund is a low risk modelled multi asset fund that currently has almost £400 million of assets under management.
Over the past year, it generated modest 3.08% growth, significantly trailing the sector average of 7.72%. However, what is most disappointing is the fund's poor long term performance. Over the past 5 years the fund's growth of 6.22% was more than 3 times lower than the 19.41% sector average, and since its launch in 2013 the fund has returned growth of 42.18% compared to the 68.42% sector average.
Overall, the L&G Multi-Index 3 fund's persistent underperformance raises concerns about the management team's ability to meet investors' expectations and generate attractive risk-adjusted returns.
L&G Workplace Pension Funds
Default workplace pension funds play an integral role in the retirement planning of most employees, as highlighted by research from The Pensions Regulator indicating over 95% of workers do not elect an alternative to their scheme’s default investment option. These default funds automatically receive individuals’ pension contributions unless active selection of specific investment vehicles occurs. Therefore, evaluating the investment quality and performance of default workplace pensions carries critical importance.
The L&G Multi Asset 6 fund represents the default mid risk range fund offering for L&G pension schemes. Our analysis shows this option has delivered competitive returns against its similar risk rated peer funds.
With the majority of pension savers passively accepting their employer's default, understanding how these funds stack up is critical.
The above chart provides a comparative performance overview of the performance of the default workplace pension options of 9 popular pension providers. With 5 year returns of 35.95%, the L&G default fund has delivered competitive performance comparative to its peers, but it was still some way below the 41.32% returned by the NEST 2040 Retirement fund.
Given its competitive performance comparative to its peers the L&G default pension does warrant consideration by employees reviewing their workplace retirement plan options. However, it is also important to be aware that there are thousands of funds available to UK investors, many of which are under utilised yet consistently represent exceptional value and strong performance.
Book a free no obligation call to discuss high quality investment options for your pension or ISA.
Summary
To summarise this report, we found that 53.2% of Legal and General pension funds and 58.2% of their unit trust/ ISA funds received low 1 or 2 star ratings, which indicates consistent subpar performance from over half of their fund range.
Whilst disappointing it is not entirely surprising, as most fund management brands with such extensive fund offerings will see underperformance from a portion of their funds. In contrast, 24.4% of L&G’s ISA/unit trust funds and 16.5% of their pension funds have consistently outperformed their peers warranting a top quality 4 or 5 star performance rating.
In conclusion, Legal & General provides a diverse range of funds with differing levels of quality. Whilst many of their funds have below par performance there is still a large selection of high quality, top performing funds that investors can choose from. By accessing the full investors will be able to easily identify the performance and rating of the entire L&G fund range.
Get free access now to our entire fund research platform and identify which L&G funds have outperformed.
Invest In Quality
There are thousands of fund options from which to construct a portfolio but with most funds underperforming it is often the case that many investors experience disappointing returns from their investments.
At Yodelar, our portfolio development stems from years of exhaustive analysis on the universe of funds and managers. We consistently evaluate over 100 managers, tens of thousands of funds, and 30,000 model portfolios. This ongoing research reveals that only a small subset of funds and managers consistently outperform, with over 90% of portfolios containing chronic under-performers.
These data-driven findings inform our structured portfolio construction process of utilising top-tier, proven funds within each asset class based on rigorous backtesting.
As an FCA-regulated firm, we believe advanced analytics should anchor advice. Our goal is to provide independent guidance and portfolio management designed to meaningfully enhance client returns through research.
By conducting exhaustive due diligence on the global fund universe, we identify elite managers who we believe are best placed to sustain outperformance. These insights allow us to construct optimised portfolios aimed at maximising clients' growth potential within defined risk parameters.
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