Even a Small Rate Increase Would Dent Long-Duration Bond Funds

From Focus on Funds
December 28, 2012 - 1:43pm

In 2013, watch for greater investor awareness of duration risk. Ned Davis Research’s Neil Leeson just sent clients a great example why. The $3.2 billion iShares Barclays 20+ Year Bond Index Fund (TLT), full of long-term Treasuries, yields about 3%, and the duration is over 17 years. Leeson calculates that a 0.25% interest-rate hike would take a 4.3% bite [...]

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