Investing in short duration
Offer a first step onto the credit ladder with potentially less uncertainty.
Why AXA IM for Short Duration
With investment teams based across the major investment markets, we are able to provide our clients with the best short duration ideas from our local experts.
Through this experience and expertise, we have developed a range of short duration strategies to meet our clients needs including our market leading US short duration high yield strategy.
In the current market environment, investors looking for income sources are moving up the risk spectrum in their search of higher yields. Short duration strategies offer a potential route for many different investing requirements:
Exposure to asset classes
Through Short duration strategies, investors can find exposure to underlying asset classes such as high yield or inflation with potentially less interest rate risk exposure.
Complementary to cash
Short duration strategies may be complementary to cash or money market allocations due to their potential for frequent cash flows.
Reduced volatility
An actively managed short duration solution focused on careful credit selection provides cautious investors with an option that reduces volatility associated with taking on more risk, especially when market conditions are set to remain volatile.
Less uncertainty, dampen volatility and improve liquidity
Short duration bonds offer the potential to deliver a more attractive income than cash or ‘safe-haven’ government bonds currently, while aiming to minimise interest rate risk and smooth volatility.
Bonds with shorter durations are less sensitive to changing interest rates and therefore usually less volatile in a changing rate environment. Furthermore, cash flows from frequently maturing bonds may provide better liquidity than longer-term bonds which offers the potential to be regularly re-invested at higher yields in the market. This makes short duration bonds likely to be less volatile than longer duration fixed income debt.
An intermediate step
Of course, short duration strategies are not entirely risk-free but rather offer an intermediate step out of cash into riskier assets but with lower volatility than longer-duration credit. This potentially provides the opportunity for a more cautious route to seeking capital growth and higher income in more adventurous areas such as short-term high yield or emerging market corporate bonds.
Risks
No assurance can be given that our fixed income strategies will be successful. Investors can lose some or all of their capital invested. Our unconstrained fixed income strategies are subject to risks including counterparty risk, operational risk, liquidity risk, credit risk, and the impact of any techniques such as derivatives. The use of such strategies may also involve leverage, which may increase the effect of market movements and may result in significant risk of losses.
Fixed Income
We cover a broad spectrum of fixed income strategies to help investors build diverse portfolios that can be more resilient to economic and market shifts.
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