1. What’s the Strategy’s focus?
The Global Short Duration Bond Strategy invests in a diversified portfolio of debt securities, offering broad exposure across geographies, sectors, and asset classes. It has a global mandate, including allocation to emerging markets, with a primary focus on corporate bonds. It also maintains a meaningful allocation to asset-backed securities (ABS), mortgage-backed securities (MBS), government bonds, and money market instruments for liquidity and cash management.
Each asset class is managed by a dedicated specialist portfolio manager, drawing on the broader research capabilities of the firm.
Each asset class is managed by a dedicated specialist portfolio manager, drawing on the broader research capabilities of the firm. This integrated approach enables us to identify the most attractive opportunities across global markets.
By maintaining a short duration, the Strategy seeks to limit sensitivity to interest rate volatility while continuing to capture income and spread opportunities across regions and sectors. Importantly, the Strategy mitigates currency risk. We invest in hard currency securities, and any non-US dollar exposure is fully hedged back to US dollars, the base currency of the portfolio.
Figure 1: The global opportunity set
2. What’s the Strategy trying to achieve and how do you define success?
The Strategy aims to deliver consistent income and attractive risk-adjusted returns. Success is defined by a combination of capital preservation, stable performance across market cycles, and outperformance versus short-duration benchmarks.
The front end of the yield curve offers the means to seek potentially attractive returns with controlled duration risk. Our approach can add value through global flexibility, specialist portfolio management, disciplined credit selection, and a robust risk management framework supported by the firm’s broader research platform.
3. Why Global Short Duration Credit and why now?
The Global Short Duration Bond Strategy can offer a compelling balance of income and resilience in a world increasingly defined by uncertain growth, shifting central bank policies, and elevated rate volatility. The global opportunity set allows investors to access relative value across regions and sectors, while shorter maturities provide flexibility to adapt quickly as conditions change.
With currency risk minimised through systematic hedging back to US dollars, investors can focus purely on underlying credit opportunities rather than foreign exchange volatility.
4. Where can the Strategy add value compared with traditional credit approaches?
A global short duration approach can be nimbler and more opportunistic than traditional longer-duration or benchmark-constrained credit strategies. It can add value through active sector allocation, off-benchmark exposures (such as structured credit), and relative value positioning across geographies.
Our structure – where dedicated specialist portfolio managers oversee each asset class – combined with access to global research and trading capabilities, can allow us to uncover and exploit inefficiencies across markets. The team invests across multiple regions and instruments, seeking to identify relative value and arbitrage opportunities to maximise overall returns.
5. How do you manage risks – particularly liquidity, credit quality, and interest-rate sensitivity – in a short-duration framework?
Risk management is central to our approach. Interest-rate sensitivity is controlled through maintaining a short duration profile. Credit risk is managed through rigorous bottom-up analysis, diversification, and a focus on issuers with strong fundamentals or improving credit trajectories.
Liquidity is carefully monitored to ensure the portfolio can meet redemptions and respond to changing market conditions without compromising performance.
Currency risk is mitigated through a disciplined hedging process, ensuring all non-US dollar exposures are hedged back to US dollars. This allows the investment team to focus on seeking to generate returns from credit selection and relative value opportunities, while maintaining strong risk discipline across the portfolio.
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