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.

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