Short Duration

Philosophy

BlackRock’s short duration strategies employ a fundamental, diversified, relative-value approach focused solely on the front end of the yield curve. The team seeks to strategically allocate among three alpha sources: macro strategies, sector allocation and security selection.

Capital at risk. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

The team views credit at the front end of the curve as having some unique attributes. The ability of a company (or securitized structure) to retire near-term debt with profits and/or balance sheet liquidity forms a critical aspect of the security selection process, with the ability to take a shorter-term view on a credit creating what may be thought of as time-horizon opportunities. With a flexible investment approach, the short duration team seeks to:

• Uncover the most attractive current market opportunities at the short end of the curve across the fixed income spectrum.
• Generate incremental yield by moving out on the curve and diversifying across spread sectors.
• Offer various strategies with differing objectives, ranging from capital preservation and liquidity to a focus on yield generation and total return.

Investors with the following objectives may find an allocation to a short duration strategy worth considering:

• Seeking to earn incremental yield on large cash positions.
• Seeking to diversify a core fixed income portfolio tethered to the Barclays US Aggregate Bond Index.

Leadership