Strategy 4 · Lowest Risk

Capital preservation first.

Short-duration investment-grade bonds. Drawdown-screened. Designed for the portion of capital you cannot afford to lose.

Approach

Screened on drawdown first — not maximum Sharpe.

Five equal-weighted short-duration investment-grade bond funds. Credit adds carry; short duration limits rate sensitivity. Every constituent requires a ten-year total-return history before inclusion.

This is the sleeve for capital that must be there when needed. It does not maximise return — it minimises the risk of a damaging drawdown. Managed by the Investment Committee, not a single PM.

~3.8–3.9%Current yield
Underlying fund statistics³

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Risk ProfileLowestCapital preservation mandate. Short-duration IG only.

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Selection CriteriaDrawdown-firstMaximum Sharpe is secondary. Drawdown history is the primary screen.

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History Required10 YearsTotal-return history per constituent — no new or untested funds

³ Statistics of underlying third-party funds. Past performance is not a guide to future performance.

Portfolio Role

The anchor, not the engine.

Ultra Defensive exists to carry the capital that sits alongside the active sleeves. For clients who combine strategies, it provides a stable base — low correlation to equity risk, predictable yield, and a history of surviving rate cycles.

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Feature

Short Duration

Limits sensitivity to interest rate movements. When rates rise, short-duration bonds recover faster than long-duration equivalents.

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Feature

Investment Grade

All constituents are investment-grade rated. Credit carry adds yield above government bonds while maintaining low default risk.

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Feature

Equal Weighting

Five funds, equal weight. No concentration in a single issuer, geography or fund manager. Rebalanced when drift exceeds tolerance.

Fees

Low cost by design.

Ultra Defensive carries the lowest fee on our shelf — consistent with its role as a capital preservation sleeve, not an alpha-seeking strategy.

Management Fee0.10%Per annum, charged annually

Performance FeeNoneNo performance fee on this sleeve

Dealing CostsAt costCharged by broker at its own rates, separate from our fees

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Plus dealing costs at the broker's own rates.

The most conservative mandate on our shelf. Still professionally managed.

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