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Bonds & Duration

RedRochey · 2019-11-04 15:50:34

Given that the higher the duration, the more a bond's price will drop as interest rates rise (and vice versa), surely most bond funds should have high durations since interest rates will more likely fall in the future?

04-11-2019 3:50pm

#1

RedRochey

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Given that the higher the duration, the more a bond's price will drop as interest rates rise (and vice versa), surely most bond funds should have high durations since interest rates will more likely fall in the future?

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Comments

#2 07-11-2019 9:08pm

Geuze

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Interest rates will more likely fall?

They are already very low in EA, Japan, Switz and UK.

You expect them to fall further?

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#3 07-11-2019 9:28pm

RedRochey

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Well in the US anyway they are predicting another rate cut next year

And in the UK 2 members of the BOE wanted to cut rates yesterday

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