AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
4min snip
Harley Bassman on Why the Big Moves in the Bond Market Are Done
Odd Lots
Duration vs credit vs convexity
In the bond market, there are three main risks to consider: duration, credit, and convexity. Duration refers to the timing of getting the money back, with longer maturities being riskier. Credit risk is reflected in the spread between investment grade and junk bonds, which is currently tighter than historical averages. Convexity, measured by the move index, is an attractive trade due to its high volatility compared to historical averages. When building a portfolio, it's essential to consider and adjust exposure to all three risks based on the market view. Presently, overweighting convexity, underweighting credit, and pulling into shorter duration on the curve is recommended.
00:00
Transcript
Episode notes
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