Why duration is negative

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Where Are Interest Rates Rising? Since July 8, rates have increased by 31, 60, 78 and 85 bps across the 2-, 5-, and year parts of the curve.

As a result, the yield curve 2 has steepened by 47 bps between the 2- and year segments. While this has been painful for long-only bond strategies, negative duration strategies have provided positive returns. As we show below, negative duration strategies have more than offset losses in a traditional portfolio primarily given the change in the shape. After nearly eight years of rock-bottom rates, many investors may have become complacent in managing interest rate risk.

We believe our negative duration strategies could offer a powerful tool that can be combined with an existing portfolio or used as a standalone way to address a steepening U.

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Quality Dividend Growth.