Importance of Macaulay Duration and Modified Duration in Debt Funds

In contrast, a bond with a duration of 10 years would lose 10% if rates were to rise by that same 1%. Conversely, if rates fell by 1%, bonds with a longer ...

What to make of debt fund duration - The Hindu BusinessLine

Make the wrong choice of duration and you can easily face capital erosion on your debt funds. But if you're looking to gauge a fund's maturity ...

Duration: a measure of bond price volatility - Nuveen

How do maturity and coupon rate affect volatility? Both determine how quickly you, the bondholder, get your money back. The longer you must wait ...

Understanding Duration - BlackRock

Macaulay Duration and Modified Duration - Study Guide - CliffsNotes

Answer: Macaulay Duration represents the weighted average time it takes to recover the bond's price in terms of present value. It provides an ...

Duration - Definition, Types (Macaulay, Modified, Effective)

MD measures the percentage change in the bond price with a change in the interest rate. It showcases the sensitivity of the yield. ED measures ...

Debt Funds: Maturity and Duration - ClearTax

You may calculate the modified duration by piding the Macaulay Duration of a bond by a factor of (1+y/m). 'y' stands for the annual yield to ...

Duration - Personal Finance Lab

Essentially an extension of Macaulay duration, modified duration is the predominant duration measure used in the fixed income industry, and is defined as the % ...

Explained: Is this the right time to invest in long duration debt funds?

If this unfolds, it is good news for long term debt funds. “A cut in interest rates would lead to additional gains in form of bond price ...

Navigating Debt Funds: Short vs. Long Duration Explained

Macaulay duration measures the time it will take for the principal of a bond to be repaid from the internal cash flows (both interest and principal) generated ...

Understanding Modified Duration in Debt Mutual Funds

Modified duration adjusts the Macaulay duration, which is the weighted average time until a bond's cash flows are received, to reflect the price ...

How should one play debt funds in a market with terrible mood ...

So one strategy would be to invest in long-term debt funds or dynamic bond funds with a modified duration of 7-11 years.

Macaulay Duration - Nippon India Mutual Fund

Macaulay Duration measures the time taken by an investor to recover his invested money in a bond after taking into account interest receipts and principal ...

Crucial Role of Debt Funds Portfolios | Tata Capital Blog

Long term debt investments are very sensitive to changes in interest rates. When rates decrease, they are at the biggest advantage. This happens ...

Demystifying Duration & Modified Duration for debt mutual funds

Now, why is this 'duration' important and what is its use? ... Understanding duration is critical for investors that invest in debt mutual fund ...

Should you match debt portfolio duration with goal duration?

Average maturity (AM): this is the simple weighted average of the age of the bonds in the fund portfolio. · Modified duration (D): Investopedia ...

Why are there 2 kinds of bond duration (Modified and Macaulay ...

The Macaulay duration calculates the weighted average time to maturity before a bondholder would receive the bond's cash flows. Modified ...

The Debt funds (Part 3) – Varsity by Zerodha

If you recollect, Macaulay duration measure in years, the time required for the bondholder to recover the price paid for the bond by the bond's ...

Duration 101 - AWS

In this piece, we clarify duration and its role in bond investing. ... Modified Duration adjusted the formula for Macaulay Duration to create a ...

Debt Funds - Association of Mutual Funds in India

The longer the maturity profiles of the instruments, the higher the interest rate risk. (Interest rate risk implies that there is an effect on the market price ...