Legal & General Investment Management (LGIM) saw £8.4 billion assets of net outflows from its index funds in the first half of the year but total assets under management rose by 7% to £465.1 billion.
The said that the continued derisking of defined benefit schemes is likely to reduce their usage of passive equity funds although the impact of this will be offset by the growth in its liability driven investment funds.
At the wider group level, Legal & General's after tax profits rose by 9% to £507 million, up from £466 million in the same period last year. This prompted the board to raise the dividend by 21% to 2.9p per share.
Group chief executive Nigel Wilson (pictured) said: 'These are strong financial results with dividends once again growing over 20% and a return on equity of 17.6%. We continue to deliver good growth on all other key metrics.
'We are successfully executing our strategy connecting our five long-term macroeconomic and demographic trends to real business outcomes. Strong business performance across a well-diversified range of insurance, savings and investment markets underpins consistent earnings quality and dividend growth and enables us to respond positively to the ever changing political and regulatory landscape.'