Northern Trust Global Investments has launched a European bond fund for institutional investors.

The Dublin-domiciled Euro Government Inflation-linked Bond Fund tracks inflation-linked government bonds, benchmarked against the Markit iBoxx EUR Sovereigns, EUR Inflation-linked ex-Italy, ex-Greece index.

The aim of the UCITS fund is to hedge inflation without taking on the credit risk associated with exposure to lower-rated countries.

“We are seeing the trend to index strategies gather momentum, and heightened concerns over medium-term inflation and its impact on pension fund liabilities. Our fund has been designed to appeal to institutional investors who will need to meet these challenges, and complements our existing range of quantitative index funds,” said Wayne Bowers, chief executive of NTGI in Europe, the Middle East and Africa and Asia-Pacific.