The L&G Sterling Corporate Bond Index Fund, subject to FSA approval, will launch on 28 August 2012 and be managed by Helen Stuart supported by the LGIM index funds team.
It will invest in the highest tiers of the sterling fixed income market, those rated AAA, AA or A, and is designed to provide investors with exposure to these high quality corporate bonds with a low annual management charge of 0.20%.
Frank McGarry, sales director, Legal & General Investments, said that as the deadline for RDR implementation rapidly approaches there has been a significant shift to passive funds in the UK advisory market.
“Many portfolio constructors are opting to blend both active and passive funds within client portfolios and this is a trend that we expect to gather momentum.
“The Sterling Corporate Bond Index Fund will provide investors with low cost exposure to a core asset class which can be used as a portfolio building block or simply as a cost efficient means of accessing the highest rated sterling corporate bonds,” he explained.
Legal & General already manages £35bn in UK fixed income tracker funds.