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10th December 2025
Copia Select: Short-Dated Bond Portfolio – Three years of steady returns and low volatility
Richard Warne, Senior Portfolio Manager, Copia Capital
Our Short-Dated Bond Portfolio (SDBP) has just passed its three-year anniversary. Looking back on performance, the team and I are very proud that it’s delivered on our core objective to provide steady and better-than-cash returns with low levels of risk and volatility.
Quick recap on the structure
The portfolio is constructed of short-dated investment grade bonds. It’s widely diversified with over 1,400 underlying holdings. Its core of short-duration investment grade corporate and UK government bonds is backed up by a satellite of high yield asset backed securities (ABSs) and emerging market debt. We’ve used a low duration strategy to ensure less sensitivity and movement in response to interest rate expectations.
You can see in the table below that over the three-year period it’s not been a smooth ride for the broader bond market. The UK Government Bond (Gilts) Index reached a maximum drawdown level (the difference between the index’s peak and its bottom point aka the largest loss an investor might have endured) of -8.4% during this time frame. Our SDBP’s maximum drawdown was significantly lower at just -1.1%.
At the same time, the steady compounding of returns has seen our strategy deliver better returns than all other relevant bond indices. Cumulatively, it’s also outperformed our cash peer group comparator by +59%.
Outlook going into 2026
We thoroughly believe the strategy still has a very strong investment case today. Low-interest rate sensitivity is particularly useful in a world where rates are constantly in question in major economies like the US and UK. And the lowest yield achieved since launch of 5.3% still exceeds the current (approx.) 4.1% yields on cash. These factors combined with the low levels of volatility makes the SDBP a compelling option for clients who want a low-risk investment option that has the potential to generate higher returns than cash.
This article is intended for regulated financial advisers and investment professionals only. Copia does not provide financial advice. This information is not intended as financial advice and should not be interpreted as such.