Long-Term Corporate Bond

Long-term corporate bonds and ETFs invest in debt securities, issued by companies,... Long-term corporate bonds and ETFs invest in debt securities, issued by companies, which typically have a duration of greater than 6 years. For investors trying to select bond funds and ETFs based on average maturity profiles, it is important to understand an underlying bond’s duration (predicts a bond’s price change due to change in interest rates) and convexity (a better price change estimator than duration) and compare bonds with different maturities and coupon rates to determine if it is right for their portfolio. As long-term corporate bonds, these bonds are more sensitive to changes in interest rates than fixed-income products with shorter terms. This can make them risker for investors worried that interest rates could rise. On the other hand, long-term corporate bonds may be attractive for investors who think interest rates may fall. Last Updated: 04/26/2024 View more View less

Long-term corporate bonds and ETFs invest in debt securities, issued by companies, which typically have a duration of greater than 6 years. For investors trying to select bond funds and ETFs based on... Long-term corporate bonds and ETFs invest in debt securities, issued by companies, which typically have a duration of greater than 6 years. For investors trying to select bond funds and ETFs based on average maturity profiles, it is important to understand an underlying bond’s duration (predicts a bond’s price change due to change in interest rates) and convexity (a better price change estimator than duration) and compare bonds with different maturities and coupon rates to determine if it is right for their portfolio. As long-term corporate bonds, these bonds are more sensitive to changes in interest rates than fixed-income products with shorter terms. This can make them risker for investors worried that interest rates could rise. On the other hand, long-term corporate bonds may be attractive for investors who think interest rates may fall. Last Updated: 04/26/2024 View more View less