Average Effective Duration definition

It is a measure of the sensitivity of the Fund to changes in interest rates. The higher this indicator is, the stronger the Fund responds to fluctuations in interest rate levels. For example, a fund with a duration of 10 years is two times more volatile than a fund with a duration of 5 years.

The duration also gives an idea of how the net asset value of the fund changes as interest rates change. It can be expected that the net asset value of a 5-year fund will decrease by 5% if interest rates rise by one percentage point.


Related words

ABC Consumer Comfort Index ・ Abandoned Baby ・ Account Statement Report ・ Appreciation ・ Arbitrage ・ ADP Non Farm Employment Change ・ Ask price ・ Ascending Trend Line ・ Average Effective Duration・ AAA+ Bank Definiton・ ABC Elliot waves・ Above the market - limit order・ Absolute Breadth Index・ Average directional index ・ Average directional index・ Aggregation・ Average Down・ Average Directional Movement・ Alpha coefficient・ Anaume・ Andrews Method・ Accumulation and Distribution