Royal London Asset Management is preparing a trio of short duration bond funds for launch.
The planned funds will include a short-duration gilt fund, an index-linked fund and a credit vehicle.
RLAM is planning on launching all three by end of third quarter at the earliest, depending on regulatory approval.
Head of government bonds Paul Rayner, who already co-manages the £419m Royal London UK Government bond fund, will run the short duration gilt fund with a target yield of between 1 per cent and 1.25 per cent.
Craig Inches, who co-managed the £424m Royal London Index Linked Gilt will manage the forthcoming shot duration version and Sajiv Vaid, who manages the £177m Royal London European Corporate bond fund, will manage the short duration credit fund. Vaid will target a yield of between 2.75 per cent and 3 per cent for this fund.
A spokesperson for RLAM says: ”It is our view that interest rates will remain on hold for the foreseeable future, but when they start to go up again then obviously the funds with lower duration and less sensitivity to change will provide a degree of protection against these rates.
“It is about ensuring we have the right collection of funds in place to meet the changing environment.”