Legal & General UK 100 Index Trust: June 2026 fund update

• Legal & General is one of the UK’s leading providers of index funds

• We think this fund is an excellent option for accessing the UK’s largest companies

• It’s a simple, low-cost way to track the FTSE 100 Index

• This fund features on our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The Legal & General UK 100 Index Trust invests in the 100 largest companies in the UK. While the FTSE 100 is a UK index, many of the companies earn money from selling their goods and services overseas. Investors are therefore indirectly investing in foreign economies as well as the UK.

An index tracker fund is one of the simplest ways to invest and we think this fund could be a great low-cost starting point for an investment portfolio aiming to deliver long-term growth. It could be a good addition to a more global portfolio or could diversify a portfolio focused on smaller companies or other investments such as bonds.

Manager

Legal & General has run index tracker funds for over 30 years and is one of the largest providers of index funds in the UK. That means it’s got the resources and expertise to track indices as closely as possible, and the scale to keep charges to a minimum.

Each index fund at Legal & General has a primary and secondary manager, though in practice the team as a whole helps to manage each fund. Jason Forster is responsible for UK fund management and is the primary manager for this fund. He previously worked on the firm’s index fund management systems before becoming a fund manager in 2002. Konstantins Golovnovs is the secondary manager for this fund. He joined Legal & General’s graduate scheme in 2010 and worked his way up to become a fund manager.

Process

This fund tracks the performance of the UK’s largest 100 companies, as measured by the FTSE 100 Index. It aims to invest in every company, and in proportion with each company’s weight in the index. This is known as full replication and should help the fund track its benchmark closely.

The fund currently has a bias towards the financials, consumer staples and healthcare sectors, which made up 26.6%, 13.6% and 13.3% of the fund respectively at the end of April 2026. The top 10 companies account for 49% of the fund so have a big impact on overall performance. This is determined by the underlying index the fund is tracking.

In any index tracker fund, factors like withholding taxes, dealing commissions and spreads, and the cost of running the fund all drag on performance. To reduce the tracking difference between the fund and the index, the team keep trading to a minimum which helps to reduce costs.

Legal & General cross trades shares internally across all its own funds when there’s an index rebalance. This provides a saving on Stamp Duty, which is a government tax that’s paid on the purchase of UK listed shares. Stamp Duty is one of the biggest contributors to the tracking difference between the fund and the index so trading efficiently like this helps to keep the fund’s performance close to the index.

The fund also participates in securities lending, where some of its investments are lent to other providers in exchange for a fee. This helps to offset some of the costs involved in running the fund but adds risk.

Culture

Legal & General has developed its index fund range over the last three decades. The company manages £550bn in tracker funds, allowing it to offer a wide range of index-tracking options.

It’s built a team of experienced index fund specialists and they’re innovative too. If an index doesn’t exist for a sector they’d like to track, they’ll often work with index providers to create a suitable index for them to track.

The team managing this fund work closely with various risk departments across the business. We believe this provides support and adds challenge where appropriate.

Employees are also encouraged to participate in Legal & General’s share save scheme which should encourage them to be more engaged with the growth of the company. In addition, a portion of fund managers’ bonuses are invested into the funds they manage. By doing this, their interests are further aligned with the investors in the fund.

ESG Integration

Legal & General Investment Management (LGIM) is predominantly an index investor, but we’re impressed with the extent to which they’ve woven Environmental, Social and Governance (ESG) into their culture. Being a mostly index fund house hasn’t stopped them being innovative when it comes to ESG. In May 2019, the firm launched its ‘Future World’ range of funds, though this fund isn’t part of that range.

In 2019, LGIM established its Global Research and Engagement Platform, which brings together representatives from the investment and stewardship teams, in order to unify their engagement efforts. Engagement is conducted in line with the firm’s comprehensive engagement policy. A detailed description of the firm’s engagement and voting activity (including case studies) is available in its annual Active Ownership report. Quarterly Engagement reports are also available.

LGIM’s Stewardship team is responsible for exercising voting rights globally, both for LGIM’s active and index funds. Voting decisions are publicly available through a tool which allows a user to search for any company to find out how LGIM voted, and a detailed rationale is provided for votes against management and abstentions.

As of the end of April 2026, this fund invests 19.22% in companies involved with the extraction of oil, gas or coal. This could leave the fund vulnerable to fluctuations in commodity prices, regulatory changes aimed at reducing carbon emissions and potential shifts in consumer preferences towards sustainable alternatives. However, the fund’s composition represents the exposure of the FTSE 100 Index meaning the team has no control over the companies included in this tracker fund.

Cost

The fund has an ongoing annual fund charge of 0.10%, but we've secured HL clients an ongoing saving of 0.04%. This means you pay a net ongoing charge of 0.06%. We believe this is good value when compared with other FTSE 100 tracker funds. Our platform charge of up to 0.35% per year also applies, except in the HL Junior ISA, where no platform fee applies.

Performance

This fund has tracked the FTSE 100 Index closely over the long term. In the last 10 years, the fund has gained 140.30%* versus 143.94% for the index. As is typical of tracker funds, it’s lagged the benchmark because of the costs involved in running the fund. However, the techniques used by the managers have helped to keep performance tight to the index. Remember, past performance isn’t a guide to future returns.

Over the past 12 months, the fund has risen 22.89%. The financials sector contributed the most to the fund’s returns as UK banks performed well. Higher interest rates have benefited banks as they increase the cost of borrowing, which boosts profits.

The basic materials and energy sectors were also positive contributors. Mining companies benefitted from strong demand and higher prices for key commodities like copper and gold. Energy companies performed well, particularly at the start of this year due to the sharp rise in oil prices.

The FTSE 100 recorded its highest annual gain in 16 years during 2025, and this momentum has continued into 2026 with the index reaching new highs. But the UK stock market, like many other global markets, experienced a sharp selloff in March 2026 following the conflict in the Middle East.

Given Legal & General’s size, experience and expertise running index tracker funds, we expect the fund to continue to track the index closely in the future, though there are no guarantees.