Legal & General Investments is launching a Sterling Corporate Bond Index fund.
The fund, which is subject to FSA approval, will have an annual management charge of 0.2 per cent and will invest in bonds rated AAA, AA or A to ensure they have the lowest risk of default and high liquidity.
The fund will also be made available on all major platforms.
LGI currently manages £35bn in UK fixed income index funds.
Legal & General Investments sales director Frank McGarry says: “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 range provides investors with low cost exposure to a core asset class which can be used as a portfolio building block or as a cost efficient means of accessing the highest rated sterling corporate bonds.”