Index investment approach

We aim to fully replicate an index by buying all the index securities in the same proportions as the index. But full replication isn’t always in the best interests of investors. So we take a pragmatic approach driven by a keen focus on achieving the best outcome for investors in a given market. Our approach aims to balance the key client outcomes: reducing costs and tracking error while enhancing returns.

Implemention of index changes

LGIM often avoids the artificial price squeezes that can occur when index changes are effected by using a spreading strategy or anticipating the index change. Each index event is analysed on a case-by-case basis and appropriate actions taken accordingly.