Finding the balance between stability and return: moving beyond cash
We’ve seen cash become a meaningful component of investor portfolios following a period of rapidly rising interest rates across Europe since 2022. Now we believe there’s an argument for reassessing excess cash allocations as returns moderate and inflation continues to weigh on real return outcomes.
For financial advisers, this presents a familiar challenge: how do I help my clients move beyond cash while preserving capital stability and enhancing potential returns? The answer may lie in short-term bonds.
Standard Life’s new Short Dated Bond Fund
Designed for clients seeking to move beyond cash without taking unnecessary risk, our new Standard Life Short Dated Bond Fund provides a practical way for investors to remain cautious, while seeking higher income than traditional cash solutions.
- Universe: invests at least 70% in bonds issued by corporations and governments anywhere in the world with a maturity of up to five years. The fund may invest up to 20% in sub-investment grade bonds.
- Diversified portfolio: over 200 securities
- Average duration: 1.5 years*
- Current yield: 3.2%*
- ESMA risk rating: 2 out of 7
- Average credit rating: A-
- AMC: 1.0%
- TER: 1.1%
*Source: Aberdeen Investments, data at 30 April 2026
Performance
The Fund’s strategy has demonstrated its ability to deliver returns in excess of both its benchmark and cash, with positive returns in 31 of the past 32 months and a maximum drawdown of 1.0% (March 2026) since launch.
| Cumulative and annulised returns | Annual returns | ||||||
|---|---|---|---|---|---|---|---|
| YTD % | 6 months % |
1 Year % | 2 Years p.a. % | Since launch p.a. %^ | 2025 % | 2024 % | |
| abrdn SICAV I - Short Dated Enhanced Income Strategy | -0.22 | 0.52 | 2.64 | 3.74 | 4.45 | 4.18 | 4.83 |
| Benchmark | -0.23 | 0.40 | 2.23 | 3.46 | 3.86 | 3.61 | 4.12 |
| Cash (Euro Short Term Rate) | 0.47 | 0.96 | 1.99 | 2.67 | 2.96 | 2.18 | 3.65 |
* Bloomberg Global Aggregate Corporate 1-3 year Index (EUR hedged). ^Since launch: 6 July 2023.
Source: Aberdeen, Bloomberg, strategy returns shown are gross of annual management charge, net of additional expenses and portfolio transaction costs and are EUR hedged, 31 March 2026. The actual return on a policy will be lower due to product charges (including adviser commission), and relevant taxes. Income received by the fund is reinvested into the fund and reflected in the unit price. These performance numbers reflect the performance of the abrdn SICAV I – Short Dated Enhanced Income Fund, the underlying fund in which the Standard Life Short Dated Bond Fund invests.
For advisers, the role of advice is undeniable – the key is in understanding your client’s risk expectations while coaching them in accepting uncertainty without defaulting to decisions that may not best serve them. This is where short-term bond strategies offer a compelling solution, they provide a natural step up from cash by introducing a modest level of additional risk in exchange for enhanced return potential.
Supporting fund documents
Learn more about the Standard Life Short Dated Bond Fund by reading our fund flyer and Supplementary Information Document.
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The Standard Life Short Dated Bond Fund is just one of many lower-risk options that Standard Life offer. We have a fixed-rate structured deposit product from Barclays that offers 11% (3.03% CAR) over a term of three years and six months, available until 3 June 2026. We also offer several deposit options from Société Générale.
Please speak with your Standard Life Business Manager, alternatively, visit our Investment Choices or the Fund Centre for further information on our deposit options and our funds.