Short-Duration Bonds

Short-duration bonds can range from ultrashort, with durations ranging from three months to one year, to short-term bonds with durations of one to three years. As their name suggests, these bonds tend to be less sensitive to rate movements compared to intermediate and long-term bonds largely because they are less exposed to economic cycles, which tend to span longer timeframes.

What are the potential benefits?

  • Minimal interest-rate exposure
  • Yields adjust quickly with faster reinvestment into higher coupon securities
  • Short-term bonds offer a range of sectors and credit qualities

What does Federated offer in this category?