British pension investors are snapping up index funds these days. In the first half of 1999 local fund manager Legal & General Group PLC reaped the largest increase in such investment, but the US' State Street Global Advisors moved rapidly up to second place behind it.
"There is a major shift in pension-fund investing in the U.K.," said Chris Robinson, director of corporate pensions of Legal & General.
One example is London Transport, which operates the city's famous underground rail system. For the first time, the pension fund has made a major shift toward bonds and index funds. In this case the beneficiary is another giant indexer, Barclays Global Investors, which received a portion of the system's 3.5 billion pound portfolio amounting to approximately 1 billion pounds.
Legal & General reported a 25% growth in funds under management (to 93.6 billion pounds) as of June 30, most of it in index funds.
State Street Global Advisors said the strong demand for index funds is growing not only in the UK, but also across Europe and Asia.