Legal and General Distribution Fund

[irishno1]

Hi,


Anyone any experience of Legal and General Distribution Fund, thinking of investing money for children into it. Seems to have good form?

[dunstonh]

Its a lazy investment fund and over used. It does have its purposes but it would depend on your investment timescales, which tax wrapper is being used and your attitude to risk as to whether it would be best for you.

[EdInvestor]

What is it invested in?

Seems fairly new - only one year's returns (+10% - lacklustre) but no details on the Trustnet site.

I assume it's a cautious managed fund?

Children's money ought usually to be put in more high risk investments as they won't need it for years and can benefit from the reduction in risks that a long period of investment supplies.

[cloud_dog]

OK, putting myself out on a limb now (so this post may not be 100% factually corerct I'm affraid)...........

I tend to view Distribution funds in a similar vein to income or bond funds as they tend to mix and match between the two asset classes (held the New Star Dist. Fund - 16% return on previous year, if memory serves). I believe the advantage Distribution funds have is that they can reclaim the tax deducted on some of the income (see told you I was not 100% sure).

I thought they were viewed as a 'steady' fund for those looking for some capital appreciation and a reasonable level of income, i.e. 5%.

Please don't 'bark' me down if I've got it wrong.

cloud_dog

[dunstonh]

The current version of the fund is only a year or so old. The older version has gone on much longer than that. Its fair to compare them to cautious managed funds but with a greater income slant. To be fair to L&G, their fund has had a good track record in the past as far as distribution life funds go.

The concerns to me here are:
1 - why put all money in one fund with one fund manager
2 - why use a life fund tax wrapper when an ISA, OEIC/UT may be more appropriate (may not be depending on whether higher rate tax payer or trusts being used).

It should also be noted that the fund manager changed on the L&G distribution trust last year to someonme with significantly less experience than before and performance since then has been below par. Also, S&P have just downgraded the fund