The fund will be co-managed by Steve Logan, head of European High Yield, and Lesley O'Neill, investment director, European High Yield. Jointly they have over 32 years' experience and have worked together for over eight years. Focused exclusively on High Yield, they have established a track record in managing high yield bond portfolios.

The duo will manage the fund using a best ideas approach, identifying high yield bond opportunities across the European high yield bond market to construct a portfolio of around 75 stocks. SWIP says that while the fund will retain a European bias, the best investment ideas from SWIP's New York-based US High Yield team will also be utilised. Unconstrained by a benchmark, the managers will have greater investment freedom to select stocks in which they have the highest conviction.

Mr Logan said: "Our Fixed Income business has seen some significant developments during the course of 2011 including the strengthening of our High Yield teams in both the US and Europe. The launch of this new fund is another exciting milestone and adds further strength and depth to our fixed income proposition.

"We have a team of experienced high yield professionals with strong stock picking skills who will be key in helping us drive performance. From a market perspective, we believe the European High Yield asset class will, over the long term, continue to demonstrate strong growth driven by issuers' desire to secure long term capital away from the banking sector. For investors, the high yield asset class offers the prospect of a strong risk adjusted return and a high level of income that is diversified from equities and other fixed income segments.

"As stock pickers, we believe the High Yield market currently offers investors a number of exciting opportunities. A recession in Europe is already priced into the asset class and the high quality end of the market looks fundamentally cheap."

Lesley O'Neill added: "We will continue to exploit high quality names with strong business models and resilient cash flows and see long term value in high yield issuers such as Heidelberg Cement, Iron Mountain and Dutch cable company, Ziggo. "

SWIP has a European and US High Yield team of eight based in Edinburgh, London and New York and manages high yield assets totalling £2bn. The High Yield teams sit within SWIP's Fixed Income business which manages £67.7bn in fixed income and cash assets. SWIP parent company Scottish Widows is an IFP sponsor.