Bestinvest rating
LEGAL & GENERAL US INDEX TRUST R

LEGAL & GENERAL US INDEX TRUST R - Overview

Overview of LEGAL & GENERAL US INDEX TRUST R

The fund aims to provide growth by tracking the performance of the FTSE World USA Index. This index consists of around 600 large and mid cap US equities, weighted by market value – performance is very similar to the better known S&P 500 index. The fund invests in the physical shares in the index using a process known as “pragmatic replication” – typically all index constituents are held, but some illiquid stocks may occasionally be omitted.

  • Standard Initial Charge 0.00%
  • Initial charge via Bestinvest 0.00%

Fund summary

Sector North America
Structure UNIT TRUST
Launched September, 1992
Size £2,506m
Yield 1.0%
Charging basis Income
Dividends paid 5/2, 5/8.

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.65%
Total expense ratio 0.81%

Risks

Before investing make sure you have understood the risks relevant to the fund by reviewing our Risk Warnings section. Further information on the risks are contained in the fund's Key Investor Information Document, which we make available to you before you make a decision to invest, alternatively it is available on request.

Bestinvest view

This was previously a rated fund, but was downgraded by Bestinvest because the charging structure is no longer competitive. There remains a strong case for using passive funds for US equity exposure, but we suggest investors consider cheaper products such as the HSBC American Index fund.

Portfolio

Allocation Proportion(%)
Equity 100
High yield bonds 0
Quality bonds 0
Property 0
Commodities 0
Hedge 0
Fund cash 0
Allocation Proportion(%)
UK 0
Europe 0
North America 100
Japan 0
Pacific 0
Other Equity 0
Allocation Proportion(%)
Large Caps 84
Mid Caps 16
Small Caps 0
View all performance data for this fund

Investment process

Passive management (ie index tracking) is a core part of Legal & General's business and hence there is a well resourced and structured team in place. This fund tracks the FTSE World USA Index, which consists of over 600 large and mid sized US equities (minimum market cap around $1bn). L&G use a tracking method they call “pragmatic replication”, meaning they will typically hold all the shares in the index, but may sometimes omit companies on liquidity grounds. Where this happens they will buy a basket of similar shares as an interim measure, aiming to buy the stock itself when the market becomes more liquid. Much share trading can be crossed within L&G, i.e. stocks are swapped between L&G’s funds without transaction costs. Other transactions are carried out via trading platforms. Where trades have to be carried out via external brokers, L&G believe their size gives them buying power and hence reduces costs.

Live feed

Bid price(inc) 224.00p 0.80p
Accum units 249.80p
Fund commentary 17/07/12
Fund data updated on 17/04/14

Asset allocation

Allocation Proportion(%)
Equity 100
High yield bonds 0
Quality bonds 0
Property 0
Commodities 0
Hedge 0
Fund cash 0

Equity Geographic

Allocation Proportion(%)
UK 0
Europe 0
North America 100
Japan 0
Pacific 0
Other Equity 0

Equity Capitalisation

Allocation Propor
tion(%)
Large Caps 84
Mid Caps 16
Small Caps 0

Top 10 holdings

As at: 31/12/2013
2.89% Apple Inc
2.53% Exxon Mobil Corp
1.78% Google Inc
1.64% General Electric Co.
1.61% Microsoft Corp
1.44% Johnson & Johnson
1.39% Chevron Corp
1.38% Jpmorgan Chase & Co
1.27% Wells Fargo & Co
1.27% Procter & Gamble Co
Source: Trustnet

Sector breakdown

Financials 17%
Technology 15%
Consumer Services 14%
Industrials 12%
Health Care 12%
Consumer Goods 11%
Oil & Gas 10%
Utilities 3%
Basic Materials 3%
Telecommunications 2%

Portfolio details

Index futures may be used to manage cashflows. There is no stocklending.

Constraints

The target tracking error of the fund is set at +/- 0.5%.
This is a tracker fund and is therefore managed passively.

Average monthly relative returns Bestinvest MRI
09/10 10/11 11/12 12/13 13/14   3 years 5 years Career 3 years 5 years Career
-0.03% -0.07% -0.17% -0.05% -0.05%   -0.09% -0.07% -0.08% 37.10% 44.00% 42.50%
Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Shadi Sarhangpour

Manager. Sarhangpour is a fund manager and heads up the team responsible for the index fund management of the Japan, North America and Europe (ex UK) regions. She joined the LGIM Overseas Index team in 1996 and became a fund manager in 2000. Sarhangpour read Economic History and American studies at the University of Wales and holds the Investment Management Certificate.

Track record

Shadi Sarhangpour has 7.3 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.08%. During the worst period of relative performance (from July 2007 - January 2014) there was a decline of 9% relative to the index. The worst absolute loss has been 30%.

Periods of worst performance
Absolute -30% (May 2007 - February 2009)
Relative -9% (July 2007 - January 2014)

Other funds managed

Sector record since January 2007 (7 yrs)




About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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