What are short duration bonds?

Short duration bonds are bonds that have a shorter time to maturity, typically less than five years. Duration measures how sensitive a bond’s price is to yield movements, i.e. changes in government bond yields and credit spreads.

Who could benefit from short duration?

 Re-risking

Investors currently in cash who are unhappy with returns and are willing to take on more risk

 Derisking

Fixed income investors who are worried about renewed volatility, rising yields and liquidity conditions.

What to look for in a short duration bond fund

 Is the low duration a direct outcome of using short duration bonds or derivatives?

 How diversified is the portfolio in terms of sectors, countries and issuers?

 How much of the fund matures within 1 year?

AXA Investment  Managers short duration solutions

What are the risks to consider?

  1. Credit risk:

    The risk of default on a debt that may arise from a borrower failing to make required payments

  2. Duration Risk:

    The price sensitivity of the bonds to changes in yields.

  3. Liquidity risk:

    The risk of not being able to trade quickly enough in the market without impacting the market price.

Important information

For professional clients only and must not be relied upon by retail clients. This communication does not constitute an offer to buy or sell any AXA Investment Managers product or service. It is provided to you for information purposes only. The views expressed do not constitute investment advice. The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested. Before making an investment, investors should read the relevant Prospectus and the Key Investor Information Document, which provide full product details including investment charges and risks. The information contained herein is not a substitute for those documents or for independent advice. Issued by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales No: 01431068. Registered Office: 7 Newgate Street, London EC1A 7NX. 20792 09/2016