Imagine diving into the vast ocean of global markets without the hassle, all while keeping your wallet happy – that's the enticing allure of the Legal & General International Index Trust. But here's where it gets intriguing: is this straightforward path the secret to building wealth for the long haul, or are there hidden currents we should navigate carefully? Let's explore this December 2025 fund update and uncover what makes it tick.
Legal & General stands out as a top player in the UK's passive fund scene, offering investors reliable ways to tap into markets with minimal fuss.
We see this particular fund as a stellar choice for those eager to gain broad access to international equities.
It's an affordable and straightforward method to mirror the returns of the FTSE World ex UK Index, a benchmark that captures global performance outside the UK.
Right now, this fund shines on our Wealth Shortlist (https://www.hl.co.uk/funds/help-choosing-funds/wealth-shortlist), a curated selection of funds picked by our experts for their promising long-term potential.
How it fits in a portfolio
The Legal & General International Index Trust (https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/legal-and-general-international-index-trust-c-accumulation) gives investors wide-ranging exposure to worldwide markets and industries, deliberately leaving out UK-based companies. This coverage spans firms in established developed economies and even some fast-growing emerging markets, though keep in mind that emerging markets can carry higher risks, like economic instability or political changes that might affect investments.
For newcomers, think of an index tracker fund as a simple, automated way to invest – it's like having a smart robot that follows a pre-set path without needing constant human input. We believe this fund serves as an excellent, budget-friendly entry point for a portfolio focused on sustained growth over time. It can add international variety (https://www.hl.co.uk/learn/diversification) to an existing UK-centric portfolio, helping to spread out risk, much like not putting all your eggs in one basket. For example, if UK stocks dip due to local economic shifts, global holdings might help balance things out.
Manager
Legal & General has been expertly handling index tracker funds for more than three decades and ranks among the UK's biggest index fund providers. This scale brings not only deep resources and knowledge to closely follow market indices but also the ability to maintain low fees for investors.
Every fund at Legal & General has a primary and secondary manager, but the reality is that the whole team collaborates on oversight. Leading the charge for this fund is primary manager Hailey Choi, who joined in 2022 after honing her skills at Samsung Asset Management as an ETF portfolio manager. The secondary manager is Jason Forster, who transitioned from working on the firm's index fund systems to becoming a full-fledged fund manager back in 2002. And this is the part most people miss: the collective expertise ensures that decisions aren't made in isolation, fostering a collaborative environment that could lead to more robust outcomes.
Process
This fund aims to replicate the performance of the FTSE World ex UK Index. As you'd expect from a truly global offering, a significant chunk – about 70% – is tied up in American companies. The remaining balance spreads across diverse regions such as Japan, Canada, and Taiwan, with no UK involvement. When it comes to sectors, technology dominates at 35%, followed by key areas like finance, consumer goods, and manufacturing.
Currently, the fund holds 2,226 investments compared to the index's 2,401. Ideally, they'd mirror every company in the benchmark proportionally, but that's not always feasible – smaller firms can be trickier to trade quickly and cheaply, potentially slightly affecting results. This approach, called partial replication, allows the fund to stay closely aligned with the index without the extra expense of owning everything. To put it simply, it's like baking a cake by following a recipe closely but skipping a few obscure ingredients that are hard to find.
In index tracking, everyday hurdles like taxes on dividends, trading fees, and operational costs can nibble away at performance. The team works hard to minimize share turnover – how often they buy and sell – to keep these drains low. Legal & General even engages in internal share swaps across their funds during index adjustments, a savvy move that cuts costs and narrows the gap between the fund's performance and the index.
Culture
Over the past 30 years, Legal & General has crafted a robust lineup of passive funds, now overseeing around £510 billion in tracker assets, which lets them provide a broad array of index-tracking solutions.
The company has assembled a group of seasoned passive investment pros and doesn't shy away from creativity. If a desired sector lacks an existing index, they'll team up with index creators to build one from scratch for accurate tracking.
The managers collaborate tightly with the firm's various risk teams, offering both support and healthy scrutiny. Employees are motivated through a sharesave program, tying their personal stakes to the company's prosperity. Plus, a slice of fund managers' bonuses goes straight into the funds they oversee, aligning their goals with those of everyday investors – a clever incentive that could encourage more careful stewardship.
ESG Integration
Legal & General Investment Management (LGIM) is largely a passive player, but we're genuinely impressed by how deeply they've integrated Environmental, Social, and Governance (ESG) principles into their ethos. Even in a passive world, they've innovated; in May 2019, they rolled out the 'Future World' series, prioritizing companies that excel in ESG scores, although this International Index fund isn't included in that innovative range.
Back in 2019, LGIM launched its Global Research and Engagement Platform, uniting investment and stewardship experts to streamline advocacy efforts, guided by a thorough engagement strategy. Detailed insights into their actions, complete with real-world examples, are in the annual Active Ownership report, with quarterly updates for transparency.
The Stewardship team handles global voting for both active and passive funds, and you can search their public voting tool to see decisions on any company, including reasons for dissent. But here's where it gets controversial: this fund is a pure passive tracker of an index that doesn't weave in ESG filters or blacklist sectors like tobacco or fossil fuels. Is this a strength – sticking to neutral, broad-market access – or a weakness in an era where sustainability is increasingly demanded? Some argue passive funds like this might inadvertently support companies with poor ESG records, sparking debates on whether more active exclusions are needed. We think it's worth pondering: does broad inclusion dilute ethical investing, or does it provide a realistic baseline for global exposure?
Cost
The fund levies an ongoing annual charge of 0.13%, but HL customers get a 0.05% reduction, dropping it to 0.08%. In our view, this represents strong value against comparable global passive options. Remember, our platform fee of up to 0.45% annually applies too, except in Junior ISAs where it's waived.
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Performance
Global equities have shown impressive gains over the decade, with this fund delivering 258.30%* returns while closely shadowing the FTSE World ex UK Index. Much of this success stems from tech giants within the index, whose stocks have soared amid innovation waves. Yet, as always, past results aren't predictors of tomorrow's trends.
In the last year, the fund climbed 13.41% against the index's 13.56%. The U.S. market drove much of the gains, given its hefty presence, though it underperformed peers amid worries over tariffs potentially spiking inflation and curbing growth.
South Korea and Taiwan emerged as top performers, fueled by tech prowess – think semiconductor leaders like Samsung Electronics, SK Hynix, and TSMC in Taiwan, reaping rewards from AI chip demand that inflated profits and share values.
Despite positive market vibes, volatility reigned due to trade disputes, tariffs, and geopolitical tensions in Ukraine and the Middle East. Thanks to Legal & General's vast experience and resources in index tracking, we anticipate continued close alignment with the index going forward – no promises, though.
Annual performance growth
Nov 20 – Nov 21
Nov 21 – Nov 22
Nov 22 – Nov 23
Nov 23 – Nov 24
Nov 24 – Nov 25
Legal & General International Index Trust
22.37%
-4.04%
9.62%
26.38%
13.41%
FTSE World ex UK
22.66%
-4.21%
9.69%
26.47%
13.56%
Past performance isn't a guide to future returns.
Source: *Lipper IM, to 30/11/2025
What are your thoughts on this fund? Do you prefer passive options like this for their simplicity and cost savings, or do you lean toward active funds that might better incorporate ESG considerations? Is the debate over passive vs. active investing something that resonates with you? We'd love to hear your opinions in the comments – agree or disagree, let's discuss!
