Here's how to use bond duration to understand how interest rates will affect bonds and bond funds. Bond duration describes the average time period before all the cash flows are received from a bond.

Modified duration measures price sensitivity to interest rate changes. The calculation for modified duration is relatively straightforward. Modified duration is important for investors in determining ...

Interest-rate sensitivity, credit risk, and exposure to the yield curve are three of the biggest factors that have an impact on a bond's price. As a measure of interest-rate sensitivity, duration ...

Bonds are popular fixed income investment instruments and are often regarded as bearing relatively low-risk burdens. While bonds are less volatile than other investments, they are not risk-free, ...

Whether they learn it the hard way or by reading up, most bond investors know that rising interest rates undermine bond values, because investors would rather own newer bonds that pay more. That ...

Bond prices are sensitive to interest rate changes, and bond duration is a measure of just how sensitive. For instance, in Exhibit 1.1 (shown in my last article), an increase in interest rates for the ...

In November, my colleague Eric Jacobson published a Fund Spy article entitled "Bond Duration: An Art, Not a Science." In it, Jacobson listed the imperfections of duration as the predictor of how a ...

For years, investors have been enamored with bonds and disillusioned with stocks. Some of this disillusionment has been unavoidable because of the general behavior of the stock market. But it also was ...

Sean Ross is a strategic adviser at 1031x.com, Investopedia contributor, and the founder and manager of Free Lances Ltd. Cierra Murry is an expert in banking, credit cards, investing, loans, mortgages ...

About the author: Lara Castleton is U.S. head of portfolio construction and strategy at Janus Henderson Investors. After the pain of 2022’s great interest-rate reset, investors are now benefiting from ...

The investment seeks total return. Under normal circumstances, the fund will invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in corporate bonds (80% ...