Legal & General Investments has launched a new fund tracking short-dated corporate bonds in response to increased investor demand for shorter maturity fixed income products.

Legal & General Investments has launched a new fund tracking short-dated corporate bonds in response to increased investor demand for shorter maturity fixed income products.

The firm said in a statement that the Legal & General Short Dated Sterling Corporate Bond Index Fund will track the Markit iBoxx Sterling Corporates 1-5 Index, comprised of investment-grade corporate bonds denominated in sterling that have a maturity of between one and five years.

The fund will be managed by the Legal & General Investment Management’s Index Funds team and has an annual management charge of just 0.15 per cent. Legal & General said the fund will be made available through all major intermediary platforms.

“Investors are understandably concerned about the impact of rising interest rates on fixed income holdings and shorter maturity sterling corporate bonds can be used to reduce portfolio duration, providing a useful tool in managing the interest rate sensitivity of client holdings," said Simon Pistell, managing director, Legal & General Investments.