AllianceBernstein has launched a portfolio designed to deliver high-yield like returns but with a lower risk profile because it invests in shorter duration bonds.
The short duration high yield portfolio invests in high-yielding securities with an average duration of less than four years.
The firm says the launch takes place in an environment dominated by recent retracement of spreads and increased volatility.
Investing in sub-investment grade bonds, the strategy will concentrate on higher quality issuers excluding CCC and lower ratings, and use hedging techniques to help manage risk.
AllianceBernstein research suggests that by shortening the bond duration, investors give up relatively little return over a full market cycle, but benefit from stability during a market crisis.
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