No. of Recommendations: 0

The easiest source on interest rate risk on bonds is Vanguard 's web site But basically a fund's NAV will drop (or gain) by the average duration of its bond holdings times the change in basis points of the equivalent bonds to those it holds. With the Total Bond Market fund, roughly speaking its NAV will drop 5% for each 100 basis point increase in 5 year treasuries (since its average duration is about 5%)—this is ball park, since it also holds corporate bonds.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.