Sentences with phrase «maturity of a bond»

Alternatively, it's best to shorten the average term to maturity of your bond portfolio as interest rates enter into a rising cycle, because the shorter the term, the less their price will be affected.

When rates shot up, the severity of the losses depended on the maturity of the bonds.

He set up a bond ladder by staggering the maturity of his bond holdings.

The longer the average maturity of the bond fund, the greater will be the variation in the return on the bond fund when interest rates change.

The fund adjusts its allocations daily based upon equity and bond market volatility, correlation between the bond and equity indexes, and the yield - to - maturity of the bond index.

The company pays interest payments, usually twice a year, until the maturity of the bond when it pays the face value of the bond to investors.

The longer the maturity of a bond, the more unknowns come with it — when you think about it, it's easier to predict what will happen in the next two years than to predict what will happen in the next ten years.

For zero - coupon bonds or strip bonds, the duration will always just be equal to the time to maturity of the bond.

Namely, bond coupon payments are determined by market interest rates, the type of issuing entity (government bonds pay lower coupons than corporate bonds because of lower default risk), the creditworthiness of the issuing entity (AAA companies pay lower coupons than CCC companies), and the maturity of the bond, which we will talk about next.

Click or tap on a number in the gray bar at the bottom of the illustration to see the typical relationship between the average maturity of a bond fund's holdings and its income and share - price variability in a period of changing interest rates.

The general rule is to align the average maturity of a bond ETF with the length of time that you'll have your money invested in that ETF.

For example, if you want to invest until the maturity of the bonds, and the bonds are very safe (i.e. they are not expected to default), it does not matter that the interest rate rise.

That is because at the maturity of the bond it will converge to its maturity value which will be independent of the change of the interest rates (although on the middle of the life the price of the bond will go down, but the coupon should remain constant - unless is a floating coupon bond --RRB-.

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

Some might say this is a good time to have an average duration or maturity of the bonds in bond funds to be under ten years — perhaps even well under ten years.

One thing you can do is find out the average duration and maturity of the bonds in your fund (s).

Bond: A bond is a contract between an issuing entity (typically a government or a corporation) and a lender / investor where the lender gives the issuer a predetermined amount of money (called the principal) for a fixed term and in return receives interest payments (also called coupon payments) until the maturity of the bond.

Reinvestment risk is more likely when interest rates are declining and affects the yield to maturity of a bond, which is calculated on the premise that all future coupon payments will be reinvested at the interest rate in effect when the bond was first purchased.

See how the maturity of a bond can impact its exposure to interest rate risk.

If a tax - exempt bond is originally issued at a price less than par (as distinguished from a subsequent sale of a previously - issued bond), the difference between the issue price of such bond and the amount payable at the maturity of the bond is considered «original issue discount» (OID).

In the above example, the market discount accrued ratably over the remaining term to maturity of the bond, i.e., on a straight - line basis.

The longer the maturity of the bond, the more it will fluctuate in relation to interest rates.

For a bond fund, consider also the average maturity of bonds held in the particular fund.

The length of time until the maturity date is often referred to as the term or tenure or maturity of a bond.

The fund adjusts its allocations daily based upon equity and bond market volatility, correlation between the bond and equity indexes, and the yield - to - maturity of the bond index.

The average maturity is derived by adding up the maturities of each bond in the fund and dividing it by the number of bonds the fund holds.

It is important to look at the average maturity of any bond fund you are considering.

As for bonds, you want to insure that your holdings include high - quality government and corporate bonds with a variety of maturities (although the average maturity of your bond holdings should be in the short - to intermediate - term range (say, two to seven years).

Recall that the main idea is to extend the maturities of your bond portfolio when yield curves steepen and reduce the maturities when yield curves flatten.

The longer the maturity of the bond, the bigger the swing in prices.

As maturing proceeds are reinvested at the end of the ladder, the yield of the portfolio is greater than what would be expected by the average maturity of the bond portfolio because of the positive slope of the yield curve.

The concept of staggering the maturity of your bonds is the final, and crucial step to creating a truly boring, sleep - at - night portfolio that is still capable of a cash yield approximately 5 % above the inflation rate.

A goal of a properly structured laddered bond portfolio should be to buy primarily non-callable bonds, or bonds that are only callable within a few years of maturity, as opposed to having 10, 15 or 20 years between the call date and the maturity of the bond.

Average maturity is used for taxable fixed - income instruments and is a weighted average of all the maturities of the bonds in a portfolio.

The market value - weighted average maturity of the bonds and loans in a portfolio, where maturity is defined as the stated final for bullet maturity bonds and loans.

The average maturity of the bonds in the fund and index is between five and 10 years.

A put option allows the holder of a bond to «put,» or present, the bond to an issuer (or trustee) and demand payment at a stated time before the final stated maturity of the bond.

As a result, key characteristics of a bond index, such as the average maturity of bonds in the index, can change every year.

Clearly, actual holding periods, particularly short - term ones, could produce significant capital gains or losses — primarily for long - term bond funds with average maturities of bonds in the portfolio over 10 years.

The downside risk for the biotech fund particularly short - term ones, could produce significant capital gains or losses — primarily for long - term bond funds with average maturities of bonds in the portfolio over 10 years.

Especially now, when bond yields are so low, I don't see a lot of reason to extend the maturities of my bond portfolio, aside from a small position in ultra-long Treasuries, which is a hedge against deflation.

3) The average maturity of bonds held by foreign investors in US Treasuries is falling.

A laddered bond portfolio, which staggers the maturity of the bonds and reinvests the proceeds at regular intervals, is a good start, but you need to diversify beyond that.

Buy individual securities By buying individual TIPS, you not only eliminate the expense of the fund, but you can also control the maturity of the bonds you buy.

A bond premium reduces the yield to maturity of the bond, while a bond discount enhances its yield.

Referring to San Mateo County's lawsuit, which is nearly identical to the lawsuits filed by Santa Cruz, Imperial Beach, and several others, Haines says San Mateo's «complaint generally referenced sea level change expected to occur by 2100, long after the maturity of the bonds in question.»

Not exact matches

Under this hypothetical policy, governments transfer money directly to taxpayers to encourage spending, a handout funded by issuing bonds with a coupon of zero and no maturity date, which central banks buy.

However, if rates are about to head higher for an extended period of time, investors may want to consider shortening up the maturities in their bond portfolios.

In March 2018, SES secured an eight - year EUR 500 million Euro Bond at a low annual coupon of 1.625 % which allows SES to refinance an upcoming debt maturity at more favourable terms.

«Bonds can be a stable reserve of value, or they can be as volatile as stock,» said David Yeske, co-founder of advisory firm Yeske Buie Inc. «I think a lot of advisors are shifting their bond allocations to shorter maturities and higher credit quality.»