Legal & General Investments is set to launch a global emerging markets government bond index fund, which be the first UK authorised index tracker providing coverage of this market.
The fund, scheduled for launch on 11 December, provides passive exposure to emerging market government bonds by tracking the JP Morgan Emerging Markets Bond Index Plus.
The tracker invests in bonds constituting this index, which are issued by sovereign entities and denominated in US dollars.
The product also offers low cost exposure to the asset class, with an annual management charge of 0.30%.
Simon Ellis, managing director at the firm, said: ‘Emerging market government bond funds represent a significant opportunity for investor portfolios, with yields that typically outstrip those of developed market government bond funds.
‘They also act as a diversifier in portfolios with concentrated holdings of conventional gilts or corporate bonds.’
Other passive products in this area include the iShare JPM Emerging Market Bond in USD ETF, although this fund carries a higher TER, at 0.45% per annum.