Thursday, May 21, 2015

Oil Bottum Revisited

Negative Duration--The Long and Short of It













When interest rates eventually start rising, the price of bonds will fall.  The longer the duration of the bond, the steeper the decline.  Portfolio managers are using some tools to decrease the "duration" of their portfolios.  The following link introduces this subject of negative duration and how it is possible.

Morningstar Article on Negative Duration