Duration risk at work

For many investors, duration risk remains an abstract concept—until it impacts their portfolios. Consider a real-life example: if you had invested five years ago in a U.S. Treasury bond maturing in 2050 with a 1.25% coupon, you would have seen its value cut in half. Why? Because yields on 30-year U.S. government bonds have risen from 1.37% to 4.99% over that period.

At ECP, we have deliberately maintained short duration exposure in recent years. In today’s environment, we remain highly cautious about both duration and credit risk on behalf of our clients.

We would be glad to walk you through our thinking—please don’t hesitate to reach out.