Portfolio Metrics

Duration

Definition

What is Duration?

A measure of a fixed-income portfolio's sensitivity to changes in interest rates.

Example in practice

A bond fund with duration of five years may fall roughly 5% if yields rise one percentage point, before other effects.

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The percentage of a portfolio invested across asset classes such as cash, bonds, shares, and property.

Spreading investments across assets, issuers, sectors, or markets to reduce dependence on one exposure.

The degree to which a portfolio depends on a small number of holdings, sectors, or issuers.

The identity and due-diligence checks a financial institution performs before serving an investor.

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