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Short-Term High Yield: Solving the Duration-Versus-Credit Dilemma

This paper discusses how the Short-Term High Yield Bond Fund can help investors earn an attractive level of income while controlling duration and credit risk in a rising rate environment.

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Key takeaways

  • The Short-Term High Yield Bond Fund seeks to control duration and credit exposure while generating a high rate of income.
  • The fund’s typically short duration is intended to manage interest rate risk.
  • With a targeted credit quality of BB, the fund relies on active security selection to seek strong relative performance when spreads widen.
  • The fund seeks to generate a consistent stream of high income with limited default and duration risk through all market environments.
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