What are Short Duration bonds?
Short Duration bonds are bonds with a short time to maturity, typically less than five years.
Why consider Short Duration bonds?
Short Duration bonds can be a useful tool in mitigating the risks of both rising yields and market volatility. As a result of Short Duration bonds having less time to maturity, they are less sensitive to rising yields. For a similar reason, Short Duration bonds are also less affected by changes in interest rates, making them less volatile in general than longer duration instruments.
Our approach to Short Duration
Our Short Duration strategies generally invest in bonds with maturities of five years or less, or that are expected to be redeemed/called in five years or less, and seek to capture high current income with low overall volatility.