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Author: wcfenton Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35361  
Subject: Re: Total Bond Market ETF Date: 4/22/2003 3:03 PM
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Lokicious...

Thanks...I think! LOL!!

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.

Wow! I'm a little slow on the uptake, so, I'll probably have to read your explanation a few times to allow it to sink in. It sounds like physics in financial terms. I'll also visit the Vanguard site Lok.

Thanks again,
Bill
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