Sentences with phrase «on bond duration»

Karen had read my post on bond duration, where I explained that investors should try to match the duration of their bond fund to their time horizon.

Not exact matches

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).

However you go about getting the durations, I encourage you to use this useful tool in your future bond selections, and even to use it on any bonds you already hold.

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.

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.

«Focus on securities with shorter durations — bonds with maturities in the five - year range and stocks paying dividends that offer 3 % — 4 % yields.

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.

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.

This could be a drag on current growth and cause risk - on / risk - off gyrations, making long - duration bonds useful portfolio diversifiers.

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.

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.

Over the long term the nominal return on a duration - managed bond portfolio (or bond index — the duration on those doesn't change very much) converges on the starting yield.

Strategic Total Return continues to carry a duration of about 3.5 years in Treasury securities (meaning that a 100 basis point move in interest rates would be expected to impact the Fund by about 3.5 % on the basis of bond price fluctuations), and holds about 10 % of assets in precious metals shares, and about 5 % of assets in utility shares.

This additional yield on a riskier credit bond is called the credit spread, and it's measured against a similar duration U.S. Treasury bond.

If the Dollar broke lower, its likely too that bonds and duration would rally; defensives (staples, utes, reits) and growth (tech / biotech / discret) squeeze against crowded value unwinding (fins, energy, indus); yen and euro would squeeze mightily; gold squeezes while copper pukes in a favorite commodities «pair» unwind; HY could reverse weaker vs IG (currently everybody long CCC vs BB on the high beta trade)... this would be the theoretical path to our next pain - trade or even VaR shock.

Particularly good to see someone explain that the impact on bond funds is not the simplistic «1 % rise in bank rates means loss of duration %» but depends on the interest demanded at that point in the curve and normal supply / demand issues which are massively distorted for linkers.

Former Fed Governor Stein highlighted that Federal Reserve's monetary policy transmission mechanism works through the «recruitment channel,» in such way that investors are «enlisted» to achieve central bank objectives by taking higher credit risks, or to rebalance portfolio by buying longer - term bonds (thus taking on higher duration risk) to seek higher yield when faced with diminished returns from safe assets.

@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.

The on - the - run 30 - year bond has a coupon of 2.25 %, which is about as low as you can get, which means lots of duration.

Okay, so what is the duration of the on - the - run 30 - year bond?

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.

With stocks on shaky ground, investors with equity - centric portfolios may want to consider adding exposure to longer - duration bonds.

Two important bond measurements — credit quality and duration — can give you a good indication of the income you might receive and the risk you are taking on to pursue that income.

While this only goes back to 1999, it would still be insightful to compare these two indexes on a year by year and aggregate basis for total return and volatility to get a true sense of the difference that treasury bond duration makes.

And that's not only in the US, that's in Europe in particular, certainly in the UK, and it's difficult I think to have a certainty around it but I think our bias is that bonds are on the expensive side at the moment and we are generally in most developed markets running shy of benchmark duration positions.

For now, the Strategic Total Return Fund continues to carry a limited duration of about 2 years (meaning that a 100 basis point move in interest rates would be expected to impact the Fund by about 2 % on the basis of bond price fluctuations), mostly in Treasury Inflation Protected Securities.

When advisors were asked how they've changed, most said they have shortened the duration on their bond holdings, while swapping out some bond funds in favor of floating - rate funds and preferred securities in the financial sector.

«Many of my clients who are in or approaching retirement have a 60 percent stock and 40 percent bond allocation, with an emphasis on dividend - producing stocks and bonds that have a duration of less than six years.»

While this can be true depending on the duration of bonds owned and / or for nominal returns over an extended period of time, it is

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).

Strategic Total Return continues to carry a duration of about 3 years in Treasury securities (meaning a 100 basis point move in interest rates would be expected to impact Fund value by about 3 % on the basis of bond price fluctuations), with about 10 % of assets in precious metals shares, and about 5 % of assets in utility shares.

Interest rate sensitivity, also known as duration, is based on the Barclays U.S. Credit Bond Index (all maturities), and short - term bonds represented by the subset of bonds within the index with maturities of 1 - 5 years (Barclays 1 - 5 Year U.S. Credit Bond Index).

On Monday, Vanguard launched the Vanguard Extended Duration Treasury ETF (AMEX: EDV), which tracks the Lehman Brothers Treasury STRIPS 20 - 30 Year Equal Par Bond Index.

Bond found that helium proved a suitable replacement on long - duration dives.

That same leverage aversion exists among fixed income investors — longer duration bonds may be over-priced on a risk - adjusted basis compared to similar bonds of a shorter maturity (Barclays).

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.

There is a change going on here, and as for my balanced mandates, I think it means that I toss out my long bonds [TLT] for a small loss, and keep my duration short.

For example, if short - term rates were to rise 1 %, you would lose about 2 % on a short - term bond fund (assuming a 2 year duration), and your total return over 1 year would be about 0 % (2 % interest minus 2 % decrease in value).

Since longer - term interest rates are considered more representative of real estate financing costs, we compared how REITs with different lease durations performed in periods of increasing 10 - year U.S. Treasury Bond yields, based on month - end data.

On Tuesday, in response to evidence of accelerating yield pressures, as well the recognition that QE2 was much further along than investors widely seem to believe, we substantially cut our bond duration to about 1.5 years in Strategic Total Return.

Some funds focus on bonds with longer durations and others focus on those with shorter terms.

Moving on to non-traditional bond funds, this type of alternative asset class invests in debt holdings but seeks to hedge duration and / or credit risk.

Strategic Dividend Value is hedged at about half the value of its stock holdings, and Strategic Total Return continues to hold a duration of just over 3.5 years (meaning that a 100 basis point move in interest rates would be expected to impact Fund value by about 3.5 % on the basis of bond price fluctuations), with less than 10 % of assets in precious metals shares, and about 5 % of assets in utility shares.

Given that shorter duration bonds hold up better when interest rates rise and benefit from the increase faster, they make a great choice for investors looking to cash in on the Fed's decision.

On that basis, I'd bought XSB (a short - term bond index, average duration of about 2.9 years).

In addition to the credit worthiness of the issuer, the price of a bond on the secondary market is determined by several factors including the interest it pays, its face value and its duration or how long it is until it matures and the issuer repays the amount borrowed.

Investment adviser Kelly Gares of BlueShore Financial in West Vancouver, B.C., says one way to mitigate the risk of rising interest rates on bonds is to hold bonds that are close to their maturity date or ones with a short duration.

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.