The Traderszone Network

Published in TZ Latest News 18 August, 2014 by The TZ Newswire Staff

Target-Date Funds Face Rate Rise

The bond portion of target-date funds could be in for some rough sailing — at least in the short run — if expected changes in Fed policy send interest rates higher. That’s because increases in interest rates cause the price of bonds to drop. How much depends on how sensitive the bond portfolio is to changes in interest rates, which can be measured by the average effective duration.

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