Decarbonisation objective
Setting an explicit decarbonisation objective and integrating climate criteria when analysing issuers is a powerful way to not only mitigate climate risks but also to benefit from the transition opportunities.
The investment case
A short duration portfolio is an excellent step up for investors looking for greater returns than cash, but also for investors looking to reduce the level of risk within their core fixed-income allocation.
A better return than cash
Short-dated bonds generally offer higher yields and greater potential returns than cash due to their longer maturity.
Low duration and volatility
Helps them to mitigate the negative impact of rising government bond yields and widening credit spreads, reducing drawdowns during market downturns compared to longer-dated bonds.
Natural liquidity flow
Maturing bonds and coupon income provide an increase in portfolio liquidity, that can be used to implement active views without incurring additional trading costs.