Federated Hermes has launched a fixed income strategy targeting credit opportunities at the short end of the yield curve in response to investor demand for lower-risk, short-dated bond exposure.
The Federated Hermes Global Short Duration Bond Fund, available to investors in Ireland, Italy, Portugal, Singapore, Spain, Germany and the UK, offers an alternative to traditional liquidity products while maintaining less exposure to interest rate and credit risk compared to longer-duration fixed income funds.
The launch sits at the intersection of the firm’s $637 billion global liquidity platform and its $100 billion fixed income franchise, representing a natural extension of its short duration product range.
The fund aims to serve investors seeking stability in the face of elevated interest rates, a cautious monetary easing path and ongoing geopolitical and idiosyncratic risks. Federated Hermes noted that these market dynamics have contributed to an appetite for shorter duration assets that span multiple sectors and geographies.
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The portfolio is co-managed by Ihab Salib, head of international fixed income, and Nicholas Tripodes, CFA, head of the low duration and structured products group. They are supported by a team including Yulia di Mambro (Emerging Market research), John Polinski (European Corporates) and Andrew Lennox (European ABS).
Dan Churchouse, head of business development for UK & Ireland at Federated Hermes Limited, said: “In the current macroeconomic environment, this new Global Short Duration Bond fund will offer compelling advantages for investors. By focusing on short duration bonds, we can provide a portfolio for investors looking to extend their duration as and when interest rates come down, one that aims to deliver lower volatility, offering a more stable investment option during times of uncertainty.”
Salib added: “Our global strategy enhances diversification by spreading investments across various markets and currencies. This approach not only taps into various sources of alpha from across our fixed income platform but is also capable of generating better risk adjusted total returns. The fund also benefits from the higher liquidity typically associated with short duration bonds, allowing investors easier access to their capital. We believe this new offering perfectly complements our existing liquidity, ultrashort, and low duration strategies.”
