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Legal and General Review 2018

Topic: Fund Manager Reviews 23 April 2018

Legal and general

Legal & General (L&G) are a worldwide financial brand that has been around for almost 2 centuries. They are the UK’s largest life insurer and a Global top 20 firm by assets under management.

As one of the UK’s most recognisable and trusted financial institutions, L&G appeal to many investors who find comfort in the security of a household brand. However, brand perception can often drive consumer confidence rather than the quality of the underlying product, and as identified in this review a large proportion of Legal and Generals funds have consistently underperformed.

In this report, we analysed more than 600 L&G funds for performance and sector ranking over the 1, 3 & 5 year periods up to 1st March 2018 and some 61.5% of their funds received a poor 1 or 2 Yodelar performance rating.

 

The Best Legal & General Funds

From the 668 funds analysed for this report, 64 were unit trust & OEIC funds. Only 4 of these 64 funds have managed to consistently maintain top quartile performance within their sectors over the recent 1, 3 & 5 year periods. One of their top performing funds was the L&G Growth Trust, which holds a relatively small £198.55 million of client money. Despite its size, this fund has managed to outperform 83% of competing same sector funds over the recent 12 months with growth of 8.78%, and over 5 years it returned growth of 75.04%, which was greater than 89% of funds in its sector.

Another top performing L&G fund was their UK Property fund. This fund returned growth of 8.15% over the recent 12 months, which was significantly better than the sector average of 1.97%. Over the recent 5 years, it managed to return growth of 49.73%, which again was notably greater than the sector average (52.97%).

It is worth noting that all 4 top performing L&G unit trust funds are actively managed.

 

Legal and General fund performance review

View the complete Legal and General review 2018 in the March edition of the Yodelar magazine. Register now for just £1 for instant access to all premium reports.

 

Legal & General Life Funds

L&G are the UK’s largest Life fund provider with 211 Life funds currently available to investors - yet Legal & General manage only a small proportion of these funds with the significant majority managed by external management firms. However, as these funds are branded by L&G and available to their clients they have all been included in this analysis. Our analysis of each life fund determined that only 12 of the 211 (5.7%) available rated as top performing 5 star funds.  One such fund was the L&G Artemis European Growth fund which has consistently outperformed 90% of same sector funds over the recent 1 and 5 year periods with growth of 17.1% and 76.66% respectively.

Another top performing life fund was their Growth fund, which they also manage. This fund returned growth of 52.76%over the recent 5-year period, which was greater than 84% of same sector funds.

 

Legal and General life fund performance review

View the complete Legal and General review 2018 in the March edition of the Yodelar magazine. Register now for just £1 for instant access to all premium reports.

 

Legal & General Pension Funds

Similar to their range of Life funds, L&G offer their investors access to pension funds that are under the management of third-party fund managers. From the 393 pension funds they have made available to their clients 49 (12.5%) have been rated as top performing 5 star funds.

One of the best performing L&G pension funds is their UK Recovery fund, which has persistently been among the best performing pension funds its sector. The L&G UK Recovery fund returned growth of 63.19% over the recent 5 year period which was better than 90% of competing same sector funds. However, the Old Mutual managed ‘L&G Old Mutual UK Mid Cap pension fund,’ which also competes within the same sector, returned significantly greater growth of 125.69% over the same period.

 

Legal and General pension fund performance review

View the complete Legal and General review 2018 in the March edition of the Yodelar magazine. Register now for just £1 for instant access to all premium reports.

 

L&G Fund performance summary

 

L&G Funds That Have Struggled

One of the funds under the management of L&G to disappoint was their UK Smaller companies trust, which currently holds £349 million of client funds. This fund returned 5-year growth of 73.08%, which on the surface may seem competitive but it was, in fact, one of the lowest returns in a sector which averaged growth of 105.44%.

Another fund under the management of L&G that has disappointed was their Asian Income Trust. This unit trust fund currently holds some £403 million of client funds and sits within the often volatile Asia Pacific excluding Japan sector. Over the recent 12 months, this fund this fund returned growth of 3.52%, which ranked 85th out of 91 funds in its sector and well below the sector average of 14.05%. Over 5-years it continued to disappoint returning growth of 38.75%, which again was well below the sector average (55.64%).

From the pension range of funds L&G have on offer some 57.5% received a poor 1 or 2 star performance rating. One of these funds was the L&G Newton Asian Income pension fund which is managed by Newton & BNY Mellon. Our analysis identified that this fund has consistently been among the worst performers in its sector. Over the recent 12 months it was outperformed by 99.5% of competing same sector funds and over 5 years it ranked 184th out of 189 funds with growth 25.39%.

 

portfolio

Summary

Our analysis identified that a large proportion of L&G funds have underperformed in comparison to competing same sector funds. In fact, 61% of their unit trust, 69.2% of their life funds and 57.5% of the pension funds provided by Legal & General have received a poor 1 or 2 star performance rating.

But it’s not all negative as L&G still have a large selection of funds on offer that has consistently been top performing and remain high-quality investment opportunities.

In fact, 19.9% of the funds rated in this analysis have consistently outperformed their peers and received a ‘good’ 4 star performance rating of which more than half received an excellent 5 star rating.

 

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