Zurich Life Short Duration Corporate Bond

The Short Duration Corporate Bond Fund mainly invests in investment grade corporate bonds. It may also hold supranational bonds, sovereign bonds and cash. The fund is run actively by Zurich Life.

The Short Duration Corporate Bond Fund typically holds bonds with an average duration of 1 to 3 years. Duration is a measure of how sensitive a bond’s price is to interest-rate changes, so shorter-duration bonds are generally less affected by rate moves than longer-duration bonds. The fund’s duration may fall as low as 0 years or rise to 5 years.

Yes, the Short Duration Corporate Bond Fund may invest some of its assets outside the eurozone, including in North America, the UK, Europe, Asia Pacific ex Japan, South America and Japan. Any currency hedging, if used, will be into euros because the fund is managed from the point of view of a euro investor. Currency hedging aims to reduce losses or gains caused by exchange-rate movements.

The main risk highlighted for the Short Duration Corporate Bond Fund is liquidity risk. This means some of its corporate bond holdings may not always be easy to sell at their full value, especially when market conditions are stressed. If an investor buys or sells at such a time, it could significantly affect returns.