My Phoenix (LSE: PHNX) shares are on a roll. They’re up 36% in a year, which is pretty good going for a FTSE 100 insurance conglomerate. They boast a trailing dividend yield of 8.2%, so my total return‘s heading towards 45%. Which is even better.

This is exactly what I hoped would happen when I bought Phoenix Group Holdings, to use its full name, in January and March last year. At the time, the shares looked brilliant value, with a price-to-earnings ratio of around six or seven, and a yield heading towards double digits.

Two things worried me at the time. First, financials sector ops had been out of favour for years, with low valuations and high yields everywhere I looked. Was I missing something?

Second, I already had exposure to the sector through Legal & General Group (LSE: LGEN), which had a similar profile (cheap plus lots of income). Wasn’t I simply buying more of the same?

In many respects, yes. But not entirely.

Two very different years

Legal & General shares haven’t done half as well. They’re up just over 10% in the last 12 months, less than a third of the growth from Phoenix.

Phoenix has earned those returns. On 17 March, it posted full-year operating cash generation of £1.4bn, up 22%, hitting its 2026 target two years early. Adjusted operating profit jumped 31% to £825m, and it paid down debt too. The total dividend rose around 2.5% to 54p.

However, Legal & General also delivered a solid set of numbers on 12 March. Core operating profits rose 6% to £1.62bn. The full-year dividend jumped 5% to 21.36p and it’s planning a huge return of capital to shareholders worth £5bn over three years.

On Tuesday (17 June), Legal & General hosted a deep-dive day into its asset management business, and it seemed positive. Management aims to grow profits from the unit to between £500m and £600m by 2028, targeting 6-10% compound annual growth.

It’s also aiming to grow private markets assets to more than £85bn, from £57bn, while lifting fee margins to double digits.

Big asset managers

It’s impressive stuff. Legal & General’s the UK’s biggest asset manager, with £1.1trn under management, so it has scale on its side. And while Phoenix has surged, it’s not clear how much more juice is left in the tank. Analyst forecasts suggest a small pullback from here, with a median target price of 640p. By contrast, the L&G forecast points to a 5% rise to 268p.

Phoenix is enjoying its moment in the sun but fortunes can shift quickly. I’m thrilled by Phoenix and underwhelmed by Legal & General, but the gap isn’t as wide as I thought. And there’s no guarantee that the outperformance will continue in either direction.

It’s tempting to switch from the laggard to the leader, but sod’s law alone suggests that’s a risky manoeuvre. So I’ll keep things as they are.

I think both insurance giants are worth considering for long-term income and growth. But in the spirit of diversification, I’ll seek that in other sectors.