Sentences with phrase «higher duration of these bonds»

The higher the duration of a bond or fund the higher the potential for volatility in both directions when rates move.

The higher the duration of a bond or bond fund, the more sensitive it is to interest rates, and the more value it can gain or lose as rates change.

The higher the duration of a bond the greater its risk.

Given the higher duration of these bonds, they are more volatile than regular coupon bonds.

Not exact matches

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.

At that time, the 10 - year Treasury bond had a duration of just 6 years (due to the very high coupon payments and yield - to - maturity available), while the S&P 500 had an extraordinarily low duration of just 16 years.

All else equal, volatility in bond prices from interest rate moves is higher the longer you go out on the maturity and duration spectrum and the lower the level of interest rates.

Instead of a four year cash reserve, have a 5 - 7 year high quality bond ladder (I prefer the slightly longer cash duration) with a year's worth of expenses maturing each year.

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.

Interest rate risk Although high yield bonds have relatively low levels of interest rate risk for a given duration or maturity compared to other bond types, this risk can nevertheless be a factor.

Duration, expressed as a number of years, measures a bond's interest rate sensitivity: The higher the duration, the higher the interest raDuration, expressed as a number of years, measures a bond's interest rate sensitivity: The higher the duration, the higher the interest raduration, the higher the interest rate risk.

This means that if interest rates rise the price of a high duration bond will fall more than the price of a low duration bond.

High yield (HY) spreads — the difference between the yield of a high yield bond and a Treasury note of similar duration — are down 2 percentage points from their February peak, as investors buy high yield boHigh yield (HY) spreads — the difference between the yield of a high yield bond and a Treasury note of similar duration — are down 2 percentage points from their February peak, as investors buy high yield bohigh yield bond and a Treasury note of similar duration — are down 2 percentage points from their February peak, as investors buy high yield bohigh yield bonds.

Lesson 3: Duration and Interest Rate Risk — Since interest rates affect bond prices, one of the biggest risks when investing in bonds is that interest rates will move higher, causing the value of your bonds to lose value.

The Zweig bond model kept investors invested in long - duration bond ETFs over that challenging period, when the majority of analysts were calling for higher rates.

There is an M&G one which is very expensive but has a duration of < 2 (IFRC) and invests in a mix of government and high quality corporate bonds.

As these have a duration of appropriate 2.5 years, won't they roll over into higher yielding gilts / bonds?

Long - term bonds saw the worst returns during these periods, which makes sense given their higher duration (thus higher volatility and magnitude of loss).

Income potential is generally higher than that paid by U.S. government bonds of similar duration and varies depending on the fund's duration and the quality of its bonds.

Longer ‐ term bonds carry a longer or higher duration than shorter ‐ term bonds; as such, they would be affected by changing interest rates for a greater period of time if interest rates were to increase.

The market will do so by increasing the price of the high quality, long duration bonds that we currently favor to levels that no longer offer a compelling return and margin of safety.

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.

LONDON (AP)-- European stock markets dipped Thursday while the euro struck two - week highs against the dollar after the European Central Bank left its key interest rates unchanged and decided against extending the duration of its bond - buying stimulus...

The duration of the S&P Municipal Bond High Yield Index is 7.58 vs a 4.98 duration of the S&P U.S. Issued High Yield Corporate Bond Index.

This means that if interest rates rise the price of a high duration bond will fall more than the price of a low duration bond.

Yet, while duration is higher by one year, the maximum monthly volatility is about the same; neither exceeds 2.5 % for the period measured, a period that includes some of the most volatile bond market conditions since the 1970s.

As a result, the impact of interest rate fluctuations on strip bonds, known as the bond duration, is higher than the impact on periodic coupon - paying bonds.

As of January 2017, the investment grade corporate bond index bears the highest duration of 6.9, while the two high yield indices have much shorter durations of approximately 4.2.

Vehicles to consider: A mix of highly liquid accounts, such as money market funds, and less - liquid options, such as CDs or short - duration high quality conservative bond funds

For that reason, many looking at carry trading strategies will have to go out over the risk curve and borrow in a cheap major currency in order to buy a higher - yielding emerging market (EM) currency in order to earn a yield beyond that of higher - duration US Treasury bonds (considered safe yield).

High yield bonds have more interest rate sensitivity with duration of just less than 5 years and an average maturity of 6.8 years.

Accordingly, we are migrating some of our duration exposures to the shorter part of the curve and layering in partially (or fully) rate - hedged investment - grade and municipal bonds out the curve to capture higher - quality spread.

And unlike a savings account (which effectively has a duration of zero), short - term bonds will still lose value if rates move higher.

The First Asset Long Duration Fixed Income ETF provides exposure to longer dated government bonds, with the higher level of income and lower correlation to equity markets that they provide.

Rates on loans typically reset every 90 days, implying a duration of 0.25 versus a current effective duration of 4.18 on the S&P U.S High Yield Corporate Bond Index.

The price of preferred shares is influenced by interest rates and inflation, and these shares have higher yields than most bonds due to their longer duration.

The index is comprised of (a) long positions in USD - denominated high yield corporate bonds («high yield bonds») and (b) short positions in U.S. Treasury notes or bonds («Treasury Securities») of, in aggregate, approximate equivalent duration.

ProShares High Yield — Interest Rate Hedged ETF (HYHG) is a high yield corporate bond ETF with a built - in hedge that targets a duration of zero to eliminate interest rate rHigh Yield — Interest Rate Hedged ETF (HYHG) is a high yield corporate bond ETF with a built - in hedge that targets a duration of zero to eliminate interest rate rhigh yield corporate bond ETF with a built - in hedge that targets a duration of zero to eliminate interest rate risk.

These long duration higher yielding bonds represent just under 15 % of the total Read more -LSB-...]

By comparison, the S&P U.S. Issued High Yield Corporate Bond Index has a duration of over 4.8 years and is up 3.6 % year to date.

Income potential is generally higher than that paid by U.S. government bonds of similar duration and varies depending on the fund's duration and the quality of its bonds.

Usually, yield is higher with these types of bond strategies than with short duration, while interest rate risk is lower than long duration.

The price of a high duration bond will likely fall more than the price of a low duration bond when rates rise.

The reduced volatility in yields for long - term bonds lessens the effects of their higher duration.

Class A shares with sales charges performance reflects the maximum 5.5 % sales charge, with the following exceptions: Class A shares of Hartford Emerging Markets Local Debt, Hartford High Yield, Hartford Inflation Plus, Hartford Municipal Opportunities, Hartford Municipal Real Return, Hartford Strategic Income, Hartford Total Return Bond, Hartford World Bond, Hartford Schroders Emerging Markets Debt and Currency, Hartford Schroders Tax - Aware Bond, Hartford Schroders Emerging Markets Multi-Sector Bond and Hartford Schroders Global Strategic Bond reflect a maximum 4.5 % sales charge; Class A shares of Hartford Floating Rate and Hartford Floating Rate High Income reflect a maximum 3.0 % sales charge; Class A shares of Hartford Short Duration reflect a maximum 2.0 % sales charge.

While the above three funds no longer have any tax advantages, the iShares Advantaged High Yield Bond (CHB) and iShares Advantaged Short Duration High Income (CSD) have both retained their names and — at least temporarily, it seems — some of tax benefits.

Read the prospectus for your fund and it will have the average duration as well as information about the issuers of the bonds it does invest in (govt, agency, mortgage backed, foreign, high quality corporate, etc) and whether there are constraints on the target average maturity.

Limited Duration Bond Fund seeks to deliver a high level of current income consistent with low volatility of principal.

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 duratHigh - 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 durathigh - yield bonds, especially those of longer duration.

These long duration higher yielding bonds represent just under 15 % of the total market value of the S&P Municipal Bond High Yield Index which has returned 9.86 % year to date.