The fund aims to track the Markit iBoxx Sterling Corporate 1-5 Index, which contains sterling-denominated corporate bonds with maturities between 1 and 5 years. The tracker will hold a sample of the bonds in the index rather than full physical replication due to liquidity issues and to reduce trading costs, and the fund will utilise a variety of optimisation and sampling techniques to deliver the return characteristics of the reference index. We like the tracker as it gives us exposure to a diverse portfolio of liquid bonds through the universe without taking much duration (interest rate risk) and it has tracked the benchmark well historically. It is also relatively cheap with an ongoing charge of 0.14% as of February 2016.
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|Unit Trust||Bonds||Investment Grade|
Fund Manager: Chad Rakvin
Chad has been Global Head of Index Funds at LGIM since September 2015, after joining in 2013. Prior to joining Legal & General, Chad was the Global Equity Index Director at Northern Trust, where his responsibilities included managing a diverse group of investment strategies. Chad had previous appointments with Barclays Global Investors, Dow Jones Indexes and Pennsylvania Financial Advisors and is a CFA charterholder.
Fund Group: LGIM
Legal & General Investment Management (LGIM) is one of Europe’s largest institutional asset managers and a major global investor with asset under management of £728bn (as of September 2015). L&G Investments was founded in 1970, and provide investment vehicles both active and passive across a full spectrum of asset classes including equities, fixed income, property and cash.
LGIM operates as the investment management arm of Legal & General Group, a constituent of the FTSE 100 and one of the oldest and largest insurance companies in the world, founded in 1836 as the Legal & General Life Assurance Society.