Sentences with phrase «duration of their bond portfolios»

While longer - duration bonds can provide portfolio diversification benefits, shortening the duration of your bond portfolio can potentially help manage losses due to rising interest rates.

Shortening the duration of your bond portfolio can potentially help manage losses due to rising interest rates.

The duration of our bond portfolio remains relatively short as a means designed to protect against rising interest rates.

If you fear rising interest rates, the prudent strategy is to reduce the duration of your bond portfolio.

Shortening the duration of your bond portfolio can potentially help manage losses due to rising interest rates.

They could be used to lengthen the duration of bond portfolios, especially if the investor is looking to fulfill certain duration - based goals.

I would rather ask my financial advisor what is the duration of my bond portfolio and how I am at risk with the bonds held in my funds.

However, reducing the duration of a bond portfolio in such a low rate environment often results in an lower portfolio yield.

In order to address interest rate sensitivity in a low rate environment, many investors will reduce the average duration of their bond portfolios by moving to shorter maturities.

Not exact matches

Government bonds could help reduce default risk, but because of the length of maturity required to earn any meaningful yield, they do little to reduce duration risk - i.e. the overall sensitivity of a portfolio to interest rate rises.

Fidelity's Julian Potenza seconded Darda's emphasis of muni bonds, saying «investors should consider keeping the portion of their fixed - income portfolio that is currently earmarked for liquidity relatively short, in terms of duration.»

Given those durations, an investor with 15 - 20 years to invest could literally plow their entire portfolio into stocks and long - term bonds, in expectation of very high long - term returns, with the additional comfort that their financial security did not rely on the direction of the markets, thanks to the ability to reinvest generous coupon payments and dividends.

Duration, the most commonly used measure of bond risk, quantifies the effect of changes in interest rates on the price of a bond or bond portfolio.

Short duration bond funds can help you manage the impact of interest rate changes on your portfolio.

Duration is a measurement of a bond's — or a portfolio's — sensitivity to interest - rate movements.

Generally, the higher the duration, the more the price of the bond (or the value of the portfolio) will fall as rates rise because of the inverse relationship between bond yield and price.

Duration is a measure of a bond portfolio's sensitivity to changing interest rates.

Dave Nadig, CEO of ETF.com and a well - known ETF expert, recently suggested as much, noting that «Duration hedging hasn't yet had its «hedge the yen» moment when investors discovered the power of currency hedging en masse, but like currency - hedged ETFs, duration - hedged ETFs may start finding a place not necessarily as core holdings, but as finely honed tools for tweaking duration exposure in a broader bond - portfolio contextDuration hedging hasn't yet had its «hedge the yen» moment when investors discovered the power of currency hedging en masse, but like currency - hedged ETFs, duration - hedged ETFs may start finding a place not necessarily as core holdings, but as finely honed tools for tweaking duration exposure in a broader bond - portfolio contextduration - hedged ETFs may start finding a place not necessarily as core holdings, but as finely honed tools for tweaking duration exposure in a broader bond - portfolio contextduration exposure in a broader bond - portfolio context.»

Other factors also impact portfolio performance; most notably, the specific market segments in which it is invested — durations of junk bond funds will exceed durations of treasury funds with similar maturities.

(Duration could apply to a bond fund, a bond, or a portfolio of bonds).

@Matt — I should leave @TA to comment on his article when he gets a chance, but just quickly the regular Vanguard bond fund in the Slow and Steady portfolio has a duration of 12.3 years versus the index - linked fund's much greater 23.1 year duration.

Shorter ‐ duration bonds do not provide the same degree of portfolio diversification as longer ‐ duration bonds.

So we would estimate a 40-30-30 % mix of stocks, bonds, and cash to have an overall portfolio duration of about 22 years here.

We are experienced providing duration matching portfolios with high levels of precision, while also determining the appropriate level of credit risk necessary to generate incremental returns relative government bond portfolio alternatives.

Investors use duration to measure the volatility of the bond or a bond portfolio.

They evaluate factor portfolio performance based on excess return of constituent corporate bonds versus duration - matched U.S. Treasuries (thereby focusing on the default premium component of corporate bond returns).

A long duration fund should be composed of a diversified portfolio of investment grade bonds and have a long duration.

This lowering of yields has exacerbated another challenge that already existed for traditional bond portfolios: the spread between duration and yield, which exacerbates interest rate risk.

The longer the duration or maturity of the bonds in the portfolio, the more committed the managers are to those bonds.

With an attractive yield advantage over comparable maturity government bond mutual funds of similar duration and quality, the Fund may serve as a core holding for building diversified income portfolios.

Duration is a quantifiable measurement of bond sensitivity to changes in interest rates: if they change by 1 %, how much will the price of the underlying bond, or portfolio of bonds, likely change.

Much the same way you'd create a bond ladder with various maturities, when writing a portfolio of covered calls you may want to stagger your expiration dates across a few months, with a possible bias towards the near term (since time decay is better for the option writer on the shorter duration options).

They offer a diversified bond portfolio, but include a built - in hedge that targets a duration of zero to eliminate interest rate risk.

Of course, if you own a longer duration bond portfolio these numbers will not look nearly as friendly.

You can get a sense of how a bond fund will fare when interest rates rise by looking at its effective duration, a figure you can find by plugging the fund's name or ticker symbol into Morningstar.com and then clicking on the Portfolio tab.

As each bond approaches maturity the duration, or interest rate sensitivity, of the bond portfolio declines.

Here in Canada, the Bank of Canada overnight rate has stayed below 100 basis points since March 2009 and the benchmark duration that most Canadian bond portfolios track is 7.5 years as of May 2016.

High - yield corporate bonds may also be used to gain modest exposure to higher - yielding maturities, though the portfolio is unlikely to hold a large percentage of high - yield bonds, especially those of longer duration.

If you are looking to add bond exposure to your portfolio, there are a few questions you have to answer first: what kind of bonds are you looking to add, what duration are you targeting, and will you be purchasing individual bonds or a bundle of bonds through bond mutual fund or ETFs?

In NoLoad FundX, we list the duration of a bond fund in the the Portfolio Description column.

For example, given that the price return of a bond is determined by the bond's duration and yield change, a bond portfolio constructed using the volatility measure of standard deviation of price return could be biased toward bonds with short duration.

In the construction of the S&P U.S. High Yield Low Volatility Corporate Bond Index, an individual bond's credit risk in a portfolio context is measured by its marginal contribution to risk (MCR), calculated as the product of its spread duration and the difference between the bond's option adjusted spread (OAS) and the spread - duration - adjusted portfolio average OAS (see EquationBond Index, an individual bond's credit risk in a portfolio context is measured by its marginal contribution to risk (MCR), calculated as the product of its spread duration and the difference between the bond's option adjusted spread (OAS) and the spread - duration - adjusted portfolio average OAS (see Equationbond's credit risk in a portfolio context is measured by its marginal contribution to risk (MCR), calculated as the product of its spread duration and the difference between the bond's option adjusted spread (OAS) and the spread - duration - adjusted portfolio average OAS (see Equationbond's option adjusted spread (OAS) and the spread - duration - adjusted portfolio average OAS (see Equation 1).

MCR borrows the concept of DTS by multiplying spread duration by the difference between bond OAS and portfolio average OAS, instead of OAS directly.

Duration measures the sensitivity of a bond portfolio to a change in interest rates.

This definition allows for measuring the incremental contribution of each bond to the portfolio credit risk within the framework of duration times spread (DTS).

Duration can be calculated to determine the price sensitivity to interest rate changes of a single bond, or for a portfolio of many bonds.

Duration, which measures the sensitivity of bonds within a portfolio to interest rates, recently exceeded six years in the Index for the first time since 1978.

The Fund's investments in shorter duration high - yield bonds and floating - rate loans may help provide investor portfolios» a level of protection in a rising - rate environment, as investments in the Fund's universe have typically performed with low correlation to traditional bond markets.

But 10 years is a long time for a bond portfolio with a duration of less than 2 years.

Prior to 8/19/13, Fund employed a strategy of investing in fixed - rate bonds with a dollar - weighted average portfolio duration of between three and nine years.