Three years is a long time in markets. Since our short-dated enhanced income strategy launched, investors have had to contend with inflation shocks, changing interest-rate expectations, geopolitical tension and periodic bouts of market stress.
Through it all, one question has persisted: how can I target capital preservation without losing out on yield and liquidity?
A strategy built for a specific job
Our short-dated enhanced income portfolio is designed to offer a credible ‘step out of cash’ solution by combining three characteristics that investors often want, but do not always find together: enhanced yield potential, price stability and advanced liquidity.
The strategy invests in a diversified mix of high-quality, short-duration bonds issued by governments and companies around the world. This includes short-dated investment-grade credit, selective high yield and emerging market opportunities, as well as holdings in cash and Treasury bills. The result is a portfolio that is deliberately built to seek income while keeping volatility and drawdowns low.
That short-duration profile is important. Longer-dated bonds can be more exposed to swings in government bond yields, particularly when markets are reassessing inflation, growth and central bank policy. By focusing on short-maturity bonds, the strategy aims to capture attractive all-in yields while limiting sensitivity to interest rate volatility and other sources of market uncertainty.
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