Legal & General US Index Trust R

This fund tracks the FTSE USA, an index of large and mid sized US equities.

  • 415.60p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 490.90p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.48%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.48%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 1.20%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 30 March 2020, fund data last updated 17 July 2012

The fund aims to provide growth by tracking the performance of the FTSE World USA Index. This index consists of a broad spread of US company shares. The fund may use derivatives for the following purposes; to help with efficient day to day management and to reduce some of the risks of the market.

Fund summary

Sector North America
Structure UNIT TRUST
Launched September, 1992
Size £4,094m
Yield 1.20%
Charging basis Income
Dividends paid 5 Feb, 5 Aug

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.48%
Ongoing charges figure 0.48%

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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.

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.

Manager research

Average monthly relative returns

  • 15/16 0.00%
  • 16/17 -0.08%
  • 17/18 0.10%
  • 18/19 -0.18%
  • 19/20 -0.32%

Bestinvest MRI

  • 3 years -0.13%
  • 5 years -0.10%
  • Career -0.12%
  • 3 years 18.90%
  • 5 years 21.50%
  • Career 20.30%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Shadi Sarhangpour

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 11.9 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.12%. During the worst period of relative performance (from January 2009 - February 2020) there was a decline of 18% relative to the index. The worst absolute loss has been 31%.

Periods of worst performance

Absolute -31.00% (May 2008 - February 2009)
Relative -18.00% (January 2009 - February 2020)

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.

Allocation

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Top 10 holdings

Data accurate as at 31 January 2020

5% Apple Inc
4.6% Microsoft Corp
3% Amazon.com Inc
1.7% Facebook Inc
1.6% Alphabet Inc
1.5% Alphabet Inc
1.5% Jpmorgan Chase & Co
1.4% Johnson & Johnson
1.2% Visa Inc
1.1% Procter & Gamble Company
Source: Trustnet

Sector breakdown

Technology 25.00%
Financials 18.00%
Consumer Services 13.00%
Health Care 12.00%
Industrials 12.00%
Consumer Goods 8.00%
Oil & Gas 4.00%
Utilities 3.00%
Telecommunications 2.00%
Basic Materials 2.00%

Portfolio

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%.

Key Investor Information - Income

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Key Investor Information - Accumulation

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