New Model Adviser Retreat 2012

This is not a consumer advertisement. It is intended for professional financial advisers and should not be relied upon by private investors or any other persons.

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• A leading provider of retail index mutual funds in the UK.

• Over 20 years’ experience in managing index mutual funds for UK clients.

• Manager of £238 billion in index funds assets*.

• The manager of choice for investment advisers to over 2,800 UK pension schemes*.

• More S&P Capital IQ Platinum fund ratings than any other UK index fund provider.

Legal & General: Massive in Passive

* Source: LGIM as at 31 March 2012

3Being a Successful Passive Provider – What Do You Need?

• SCALE.

• Long term commitment.

• Experience and skill

- Sophisticated implementation

- Reducing costs

• Is it worth adding risk to enhance returns?

4Passive Vs. Active

• Active or passive? An age old debate.

• Asset allocation or fund manager alpha?

• The ‘News at Ten effect’.

• The right blend - The best of both worlds.

• Tactical versus strategic

5Active Funds: Some Consistently Fail to Deliver

2009 2010 2011

Number of Funds271 278 283

Total number of funds in the IMA UK All Companies Sector

The Underperformers147 100 185

Total number of funds underperforming the L&G UK Index Trust R Acc

Consistent Underperformers33Number of funds that have underperformed the L&G UK Index Trust R Acc in

each of the last three years

What does this amount to? £9.25bnTotal AUM this represented as at end 2011

Data source: Lipper IM

6A Balance of Growth and Income

• The myth: Equity index funds are purely a growth strategy.

• No management style bias.

• Low fees; more income.

• Yields on index funds; a pleasant surprise.

• Income in growth markets.

Fund Fund YieldAverage Yield IMA Sector

L&G UK Index R Acc 3.10% 1.59%

Legal & General European Index R Acc 2.79% 1.60%

Legal & General US Index R Acc 1.00% 0.49%

Legal & General Japan Index R Acc 1.35% 0.73%

L&G Pacific Index R Acc 2.40% 1.36%

L&G Global Emerging Markets Index R Acc 1.47% 0.66%

Data source: Lipper IM

7Benefiting Your Business and Your Clients

• Commercial response to RDR.

• Removal of trail commission levels the remuneration playing field.

• Improved portfolio efficiency / TAA

• Customers more aware of ‘cheap beta’.

• Reduced costs – Less due diligence, easier reporting.

8Benefiting Your Business and Your Clients

Fund Manager Platform Adviser Fee

                                                                     Customer

Pays

Active ‘R’

0.75% 0.25% 0.50%   1.50% 

 

Passive ‘R’

0.40%Varied

Approach 0.25 Trail + Fee?  

0.65% + (++?)

                                                                     Customer

Pays

Active ‘I’

0.75% 0.40% 0.75% - 1%?  2%+ ?

 

Passive ‘I’ 0.20% 0.40% ?   1.50% ? 

• New Value Chain

• Historic Value Chain

9Benefiting Your Business and Your Clients

• Risk rated portfolios. Meeting the needs of the mass market?

• Expect new passive-based solutions based on simplicity and low costSource: Distribution Technology

10Accessing Global Macro Themes

• Capturing the beta of long-term global investment trends:

- Emerging markets; The rise of the consumer.

- A resource constrained world

- An ageing developed world.

- Technology; limitless innovation

11Alternatively Weighted Indices

• Market capitalisation; still the benchmark.

• Innovative indices:

- Sector weighted

- Equal weighted

- Fundamental weighted

http://www.landginvestments.com/Global-Environmental-Enterprises/Fund-Selector/Fund-Overview.aspx

12Appendix

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Fund Name Fund Charges (%)

Fund / Unit Class Name AMC OCF

Legal & General UK Index Trust I Class (Acc / Inc) 0.20 0.22

Legal & General All Stocks Gilt Index Trust (Acc / Inc) 0.20 0.23

Legal & General All Stocks Index Linked Gilt Index Trust (Acc / Inc) 0.20 0.23

Legal & General Sterling Corporate Bond Index Fund (Acc / Inc) 0.200.23

Estimated at launch

Legal & General UK 100 Index I Trust I Class (Acc / Inc) 0.20 0.25

Legal & General US Index Trust I Class (Acc / Inc) 0.20 0.23

Legal & General Japan Index Trust I Class (Acc / Inc) 0.20 0.24

Legal & General European Index Trust I Class (Acc / Inc) 0.20 0.25

Legal & General Pacific Index Trust I Class (Acc / Inc) 0.20 0.27

Legal & General Global 100 Index Trust I Class (Acc / Inc) 0.30 0.31

Legal & General Global Health & Pharmaceuticals Index Trust I Class (Acc / Inc) 0.30 0.31

Legal & General Global Technology Index Trust I Class (Acc / Inc) 0.30 0.31

Legal & General International Index Trust I Class (Acc / Inc) 0.30 0.38

Legal & General Global Emerging Markets Index Fund I Class (Acc / Inc) 0.30 0.57

Legal & General Index I Class Fund Charges

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Important Information

This presentation, and any information it contains, has been produced for use by professional investors and financial advisers only and should not be distributed without the permission of Legal & General (Unit Trust Managers) Limited.

The stated investments are authorised unit trusts managed by Legal & General (Unit Trust Managers) Limited, authorised and regulated by the Financial Services Authority.

The risks associated with each fund are set out in their respective Prospectus and Key Investor Information document, which customers should read before making any investment decisions. Additional information in relation to the Risk Management process is available on request. A copy of these documents can be obtained from Legal & General (Unit Trust Managers) Limited. Lines are open Monday to Friday, 9am to 5pm. Call charges will vary. We may record and monitor calls.

Past performance is not a guide to the future. The value of investments and any income from them can fall as well as rise and is not guaranteed. Investors may get back less than they invest.

Issued by Legal & General (Unit Trust Managers) Limited. This document should not be taken as an invitation to deal in Legal & General investments or any of the stated investments. .H134214.

Disclaimer