L&G eyes ‘major player’ status with post-RDR passive push

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Legal & General is aiming to become “a major player” in the passives space after seeing demand for the products rise in the post-RDR world.

L&G’s half-year results show sales of its passive funds rose 65 per cent to £1.2bn over the six months to 30 June when compared to the year before.

L&G’s unit trust business, which moved over to Legal & General Investment Management on 1 July to allow retail investors to benefit from economies of scale, saw gross sales rise 41.66 per cent from £1.2bn to £1.7bn.

The group says it is working to further build up its passives business, following the implementation of RDR at the start of 2013 and the greater transparency this is expected to bring.

The statement says: “We expect the impact of transparent charging from the implementation of the retail distribution review to continue to drive demand for our low cost retail passive funds and aim to become a major player in this segment.”

The asset manager expects growth in retail passive funds to stand at between 10 and 20 per cent a year over the coming five years.

LGIM witnessed total net inflows of £8bn in 2013’s first six months – double the £4bn seen in the same period of 2012. Gross inflows roses from £15bn to £24.9bn.

UK net inflows fell to £500m, down from £1.6bn one year earlier, while international net inflows jumped from £2.4bn to £7.5bn.

LGIM’s assets under management have increased from £406bn at the start of 2013 to £433bn at the year’s halfway point.