Duration

Duration — the rate-sensitivity dial of any bond or bond fund, expressed in years and used as a multiplier: price change ≈ −(rate change) × duration. A duration-2 holding loses ~2% when yields rise one point; duration-15 loses ~15% on the same move. Longer maturities and lower coupons mean higher duration. It’s the number that explains every “my safe bond fund fell 15%” story — and the first question to ask about any bond UITF a bank offers you (it’s in the fund fact sheet). Irrelevant to a single bond held to maturity, which pulls to par regardless.

First used in: 2.3 · Bonds and the peso ladder