Sentences with phrase «interest rate risk sensitivity»

The calculation is also expanded to incorporate the contribution of derivatives to the overall interest rate risk sensitivity of the portfolio.

This is designed to offer investors the best of both worlds: The diversification benefit of a traditional bond mutual fund and the declining interest rate risk sensitivity of an individual bond.

Not exact matches

Factors that will have an impact on credit quality of companies include domestic consumption trends, exports, commodity price risks, sensitivity to changes in interest rates, working capital risk, capital expenditure and sensitivity to foreign exchange volatility.

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.

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

One option for investors seeking to reduce their interest rate risk and increase yield, while still maintaining the overall risk profile similar to a traditional Canadian bond portfolio is the iShares Short Term Strategic Fixed Income ETF (XSI), which seeks to deliver a higher yield with reduced interest rate sensitivity.

While it is understandable that market participants are concerned about interest rate risk in a rising rate environment, it is interesting to note that the high yield bond sector stands out within the fixed income market with less rate sensitivity.

In a rising rate environment, interest rate risk comes to the forefront, and this is particularly true for fixed income products because of their sensitivity to interest rates, as measured by the concept of duration.

As mentioned earlier, bonds with varying levels of interest - rate sensitivity and credit risk have historically performed differently as rates rise.

To do that, you need to look at corporate bond funds with a similar duration, which is a measure of sensitivity to interest rate risk.

You'll want good prospects for reasonable returns without taking on too much credit risk or interest - rate sensitivity.

For example, in the bond portion of a portfolio with a large fixed income allocation, it's possible to pursue better income opportunities while also managing the portfolio's sensitivity to interest - rate movements or other bond risks using an actively managed, unconstrained bond fund.

And so this lengthening of maturities and lengthening of duration has caused these indices to be more interest rate sensitive and some cases, more interest rate sensitive than they've historically ever been, and so by being flexible and not using that as the basis for thinking about the risk of one's investments, what you can do is reduce the interest rate sensitivity of your fixed income portfolio.

Portfolio managers will be able to walk sponsors through a dashboard of assets, liabilities, funded status and potential risk measures, as well as model interest rate and portfolio sensitivities and provide what - if scenario analysis of portfolio changes.

Term and credit risk based 2 - factor model where the term risk premium is calculated as the difference between long - term treasuries and treasury bills and the credit risk premium is calculated from the long - term corporates and long - term treasuries while accounting for the differences in the interest rate sensitivities of long - term treasuries and corporate bonds (refer to the Hallerbach and Houweling, and Asvanunt and Richardson papers listed below).

Generally speaking the longer the term of a bond the greater the sensitivity that bond will have to the movement in interest rates, changes in the credit quality of a company or company risks associated with the business cycle of a specific company, sector or economy.

This segment is responsible for managing Comerica's funding, liquidity and capital needs, performing interest sensitivity analysis and executing various strategies to manage Comerica's exposure to liquidity, interest rate risk and foreign exchange risk.