Bestinvest says
Legal & General are regarded as one of the industry leaders for tracker funds and this fund is suitable for investors seeking low cost passive exposure to the UK equity market. The FTSE All Share gives investors substantial diversification including some international exposure, though it can be concentrated by company size - the multinationals of the FTSE 100 make up around 85% of the index. The main advantages of the fund relative to competitor products are reasonably low charges (TER of 0.51%) and a low tracking error.
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 All Share Index, which consists of over 600 companies from the FTSE 100, FTSE 250 and FTSE Small Cap indices. 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.