Sentences with phrase «of bond duration»

Due to the mixture of bond durations and other factors, this would be an apples and oranges comparison.

Such a comparison would be an apples and oranges comparison, due to the mixture of bond durations and other factors.

Not exact matches

Until now, the ECB has stated that it stands ready to increase the level of bond purchases it makes in both duration and / or size, in case the economic outlook deteriorates in the euro zone.

Under its current asset - buying and lending tool, the BOJ limits the duration of government bonds it buys to three years because it wants to push down the cost of borrowing for companies, many of whom work in three - year investment cycles.

Investing guru Bill Gross thinks bonds have entered a bear market and is favoring corporate bonds of short duration across the globe.

By the way, the duration of the five - year 5 % bond (using a current yield of 3 % and semi-annual compounding) is 4.68 years (calculated on my spreadsheet).

This is exactly the situation where knowing the duration of each of the bonds is so helpful.

Alternatively, you can do an Internet search for «bond duration calculator» and you'll find lots of choices.

The lower a bond's duration, i.e. the less «years» of duration it has, the less volatile its price will be.

It's a bit involved: you have to take the present value of each of the bond's cash flows, divide each by the total present value of all the cash flows, and then add up all of these individual durations to get the total duration of the bond.

So, how can a do - it - yourself investor find out what the duration of a bond is?

Breakevens are indications of future inflation expectations, calculated by subtracting the yield on Treasury Inflation - Protected Securities notes from Treasury bonds of the same duration.

He said the team thinks there aren't enough rate hikes priced into the fixed - income market and therefore he likes the long end of the yield curve, or longer duration bonds.

Treasury bonds, which tend to have longer durations, now represent more than one - third of the index compared with 22 percent in 2007.

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.

To be sure, the typical core bond fund sports a duration of around five years.

Meanwhile, actual and anticipated selling of short - duration bonds as companies repurpose repatriated cash has led to a widening in spreads.

Beginning in July 2013, I began slowly reducing equity exposure and am now sitting firm at 40 % with the balance in various forms of 5 yr cd's and short duration bonds.

In order to understand the impact of longer duration and low yields, let's use a real - life example of one of the largest bond funds today and look back at its history.

The Central banker announced an adjustment in the «size, composition and duration» of the bond - buying program, with a decision to be taken at the next meeting on 6 December.

The objective of this study is to determine whether there was a statistically significant change between the number of mini flash crashes during the three - minute window before the start of the October 2014 U.S. Treasury Bond Flash Crash compared to other windows of the same duration.

Some of the best and most experienced investors in the world have a habit of routinely keeping 20 % of their net assets in cash and cash equivalents, often the only truly safe place for parking these funds being a United States Treasury bond of short - duration held directly with the U.S. Treasury.

By providing liquidity to the broader eurozone (in the form of its monthly bond - buying program), the European Central Bank (ECB) is helping to limit the scale and duration of any contagion related to events in Greece.

Bond duration, a measure of interest rate risk, is near benchmark levels.

The trio of ETFs, when they launch, will round out Franklin's bond ETF lineup, which already includes a variety of actively managed fixed - income funds covering short - duration U.S. government debt, municipal bonds and the investment - grade corporate debt.

You're still dealing with all of the same bond risks as every other investor when you buy individual bonds — interest rate risk, credit risk, inflation risk, duration risk, default risk, etc..

Take an intermediate bond fund with a duration — interest rate sensitivity — of six years.

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.»

A key factor that could turn the tide for sovereign debt yields is the Bank of Japan, which meets Tuesday and Wednesday, and may decide to stop buying longer - duration bonds, according to reports.

The bond sector allocations and duration of passively - managed ETFs will not deviate at all from the benchmark index.

A bond allocation comprised primarily of individual bonds provides much more flexibility as it relates to duration management and tax efficiency.

As I have covered previously, when you own an individual bond, you invest for a set period of time and get paid interest for the duration or maturity length of the bond.

The shorter duration of the bond effectively shortens the investment horizon that is required to «immunize» the investor's terminal wealth (though not necessarily year - to - year values) from market fluctuations.

Duration is a measure that helps estimate the amount the price of a bond will rise or fall in response to changes in interest rates.

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.

So here's the thumb rule: For every 1 % change in interest rates, the price of the bond will decline by (approximately) its duration, in percent.

The duration of the on - the - run 30 - year bond is about 20 years.

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.

For bonds with embedded options (for example callable or puttable bonds), the duration measure must be adjusted to account for the fact that the bond's embedded options may change the expected cash flows of the bond.

A 10 - year bond with a 10 % coupon, however, only has a duration of about 6.75 years.

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.

I've placed them on separate scales since the duration of 10 - year bonds is smaller, and has much less volatility than the duration of stocks.

For example, the duration of the iShares 20 + Year Treasury Bond ETF (TLT) is currently 17.1 while the duration for 7 - 10 Year ETF (IEF) is only 7.6.

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

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.

The PowerShares Total Return Bond ETF is an actively managed fund with the ability to invest in any number of fixed income securities with varying credit ratings, countries, and durations.

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

With respect to individual bonds, for example, a duration of 4 years indicates that the price of a bond will rise / fall by approximately 4 % if rates in general fall / rise by 1 %.

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.