Key Morningstar Metrics for Legal & General Pacific Index Trust
- : BronzeMorningstar Medalist Rating
- : AverageProcess Pillar
- : Above AveragePeople Pillar
- : Above AverageParent Pillar
Legal & General Pacific Index represents a worthwhile investment proposition based on its broad coverage and low fee structure. However, structural geographical tilts relative to Morningstar Category peers limit its appeal.
This fund tracks the FTSE World Asia Pacific ex-Japan Index, which offers investors large- and mid-cap exposure to developed and advanced emerging equity markets in the Asia-Pacific (ex-Japan) region. With around 600 constituents, the index is broad at the stock level but has a structural tilt toward Australia and Korea, and it excludes China and India entirely.
With an ongoing charge of just 0.19%, the clean I share class is one of the cheapest offerings compared with both active peers and other passive offerings, including exchange-traded funds. All share classes of this fund have appeared in the top half when ranked against surviving category peers over three, five, and 10 years on a risk-adjusted basis.
The performance of the fund relative to its peer group will be largely determined by the geographic tilts mentioned above. However, the significant fee gap between this fund and the average category peer will continue to provide a dependable tailwind over the long term. The fund has tracked its benchmark tightly over the past five years, with the tracking difference (fund return less index return) approximating the ongoing charge. Our conviction surrounding this fund is built around the broad market exposure offered and its ultralow fee structure.
The structural tilt toward Australia, Korea, and Taiwan means that fund performance is susceptible to deviating from its average rival, but we remain confident that over a full market cycle, the fund will outperform its peers on a risk-adjusted basis.
Legal & General Pacific Index Trust: Performance Highlights
The clean I share has beaten its average surviving category peer in the Asia-Pacific equity category over three, five, and 10 years on a risk-adjusted basis. This relative performance is directly related to structural geographical bets taken against peers. Overweightings in Australia and Taiwan, and the exclusion of China and India, represent the main drivers of relative performance. The fee differential between this fund and the average category peer will continue to provide a supportive performance tailwind. The fund has demonstrated a competent tracker, exhibiting a tight tracking difference (fund return minus index return) over the trailing five-year period. Tracking error has also been low over the same period on an annualized basis.
