AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Masters in Business
At the Money: Managing Bond Duration
Sep 11, 2024
Karen Verra, Head of iShares US Fixed Income at BlackRock, dives into the nuances of managing bond duration in fluctuating interest rate environments. She highlights how longer-duration bonds typically offer higher yields but also pose greater risks during rising rates. Verra discusses strategies for capitalizing on interest rate changes, including the shift towards short-duration investments and utilizing bond ladders. The conversation also touches on the unprecedented market challenges of 2022 and strategies for protecting portfolios in uncertain times.
13:33
Episode guests
AI Summary
Highlights
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- Understanding bond duration is essential for managing interest rate risk, as longer durations typically bring higher yields but greater vulnerability to rising rates.
- As interest rates are expected to decline, investors should reassess their fixed income strategies and consider bond ladders to optimize returns.
Deep dives
Understanding Duration and Its Significance
Duration represents the interest rate risk associated with bonds, indicating how much a bond's price will fluctuate in response to changes in interest rates. For instance, a bond with a duration of five will decline in value by approximately 5% if interest rates increase by 1%. This relationship plays a critical role in bond investing, as it helps investors evaluate the potential risks and rewards linked to different bonds based on their duration. Additionally, there are key rate durations that assess interest rate risk at various points along the yield curve, which adds further complexity to understanding bond investments.
Get the Snipd
podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any
moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share
& Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode