It Really Is Time To Understand Duration

 

Featured in ETF.com, Chief Investment Officer Larry Whistler provides insight for one of the most important measures of Fixed Income risk in his article, “It Really Is Time To Understand Duration.”

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As the Federal Reserve embarks on its long-awaited interest rate “normalization” voyage, portfolio managers need to prepare their portfolios for the journey. As passengers on this ship, intended or not, bond holders everywhere will feel the sting of rising rates for the first time in nearly 10 years.

We’ve noticed a certain complacency having set in in the fixed-income arena, with few investors properly acknowledging that, indeed, one can lose money in bonds!

Five Big Bond ETFs

The largest fixed-income exchange-traded funds by assets are:

That’s more than $100 billon invested in those five ETFs alone. Although hardly identical, they all share one measure that investors should be focusing on right now: duration.

To read the entire article please click here.

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