Short Duration vs. Core Bonds in a Rising Rate Environment

April 26, 2011

In today’s low rate environment, interest rate risk has emerged as a primary concern for market participants. Given that the Fed has held interest rates near zero for over two years, many investors are worried about the effect of an increase in rates on their portfolios. As interest rates rise, the discounted value of future cash flows to bond investors falls, causing a drop in the price of bond portfolios.

Download PDF

Related Content

09.27.2023

The Implications of a Government Shutdown

The federal government will shut down if Congress is unable to pass funding legislation by October 1, and a bill…

09.22.2023

2023 Investment Symposium

Watch the flash talks from Marquette’s 2023 Investment Symposium livestream on September 15 in the player below — use the upper-right…

This chart description is for illustrative purposes only and its accuracy cannot be guaranteed. Please see full disclosures at end of PDF document in the web post. General description: Two-line chart showing Brazil CPI and Brazil Key Rate. Chart subtitle: Brazilian officials lowered the country’s key rate earlier this month in response to falling inflation. Chart source: Bloomberg as of August 2, 2023. Chart visual description: Data is monthly. Y-axis ranges 0-16%. X-axis ranges from January 2012 through April 2023 in 5-month increments; data is complete through July 31, 2023. Brazil CPI (YOY) is plotted in light blue line and Brazil Key Rate is plotted in dark blue line. Please contact us for the full dataset. End chart description. See disclosures at end of document.

08.23.2023

Brazil Eases Into the Fall

On August 2, Brazil’s central bank cut its benchmark interest rate by 50 basis points, from 13.75% to 13.25%. This…

08.16.2023

Revisiting the Banking Industry

Though the regional banking turmoil that surfaced in March has largely faded into the background, Moody’s brought focus back to…

08.10.2023

Honey, I Shrunk the Money Supply

M2 money supply, as defined by the Federal Reserve, includes M1 (currency and coins held by the non-bank public, checkable…

08.09.2023

Observations from Across the Pond

Marquette regularly sends a senior member of our research team abroad as part of ongoing manager sourcing…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >