Sep 3, 2026 · 9 min · 8 segments
Euro short-duration credit strategies maturing in under three years have the potential to limit sensitivity to interest-rate rises, help control drawdowns during volatile periods and provide stability…
Boutaina DeixonneGuest
Chris IgoeHost
And just to be clear for our listeners, duration measures the sensitivity of a bond to changes in interest rate.
So a bond with a two-year maturity, its price will be less sensitive to changes in interest rates than, for example, a bond with a 10-year maturity.
What are the attractions for investors in this uncertain world? Perhaps you could give some idea of current levels of yield in the market and what you're seeing in terms of credit trends.
Typically, investors who choose this strategy aim to manage their liquidity needs and, as you said, Chris, mitigate interest rate risk as lower duration helps limit downside compared to long duration bonds.
In these strategies, we adopt a risk aware approach, emphasizing high quality bond and careful selection to optimize risk return.
The credit show duration strategy offers the potential to generate steady income.
From a historical perspective, yields remain attractive, so approximately 3.3% for investment-grade bonds and around 5% for high-yield bonds, both with durations just below two years.
And as you are aware, all-in yields have been a key focus in the global credit market over recent years, and this trend suggests that investor demand for the Euro credit asset class is likely to stay strong in the foreseeable future.
And just to be clear for our listeners, duration measures the sensitivity of a bond to changes in interest rate.
So a bond with a two-year maturity, its price will be less sensitive to changes in interest rates than, for example, a bond with a 10-year maturity.
What are the attractions for investors in this uncertain world? Perhaps you could give some idea of current levels of yield in the market and what you're seeing in terms of credit trends.
Typically, investors who choose this strategy aim to manage their liquidity needs and, as you said, Chris, mitigate interest rate risk as lower duration helps limit downside compared to long duration bonds.
In these strategies, we adopt a risk aware approach, emphasizing high quality bond and careful selection to optimize risk return.
The credit show duration strategy offers the potential to generate steady income.
From a historical perspective, yields remain attractive, so approximately 3.3% for investment-grade bonds and around 5% for high-yield bonds, both with durations just below two years.
And as you are aware, all-in yields have been a key focus in the global credit market over recent years, and this trend suggests that investor demand for the Euro credit asset class is likely to stay strong in the foreseeable future.
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