Question

Q.) A long only bond fund manager says that she is "short duration". what does she mean?

short answer pls

my answer: average duration of her portfolio is shorter than that of the benchmark?

Answer 1

First of all, I want to explain what is long only

Long only means, what it says: a long only hedge fund has only long positions in the asset it owns( usually used for equity). So, it means , whenever market is showing bearish trend , investors will start to buy stocks, finding probably the contrarians to the general trend or at least those with the beta closer to zero.

Short duration is actually , some companies lend money fao a period of 1 to 3 years and those funds mostly take exposure only in quality companies that have proven record of repaying their loans on time as well as have sufficient cash flows from their business operations to justify the borrowing.

So, here by statement she wants to say " even it is bearish market, put money or invest money in short duration bond, which gives the assurity of repaying in short duration".