Legal & General Investment Management (Lgim) has adjusted the bond exposure in its Multi-Index range of funds to prepare for greater volatility in the bond markets.
Lgim has added exposure to a global corporate bond index in its range of fund of passive funds.
Lead fund manager Justin Onuekwusi has also brought short-dated corporate bond exposure into the range, shortening the overall duration in the funds, which means they will lose less money if interest rates rise.
The five Multi-Index funds, launched in August 2013, are risk rated and offer exposure to equities, bonds and property.
Mr Onuekwusi said: “Bond yields have remained low for a sustained period. For defensive and cautious multi-asset investors in particular, who are usually large holders of gilts, this presents a dilemma.
“Given the likelihood that government bonds will be more volatile than in the past, it’s increasingly important to spread the risk globally and also invest across the entire fixed income spectrum.
“Within the Multi-Index portfolios over the past year we have been diversifying that bond allocation.”
