Effective duration/maturity

[lawman]

Unfortunately I still have shares in PIMIX. As of July 31,2022 it has an effective maturity of 3.96yrs. It has a duration of 2.14 yrs. What's the difference?

 

[Montecfo]

It has been a good.fund over the long haul.

The effective maturity would reflect when the securities held are expected to be repaid or called on average. It is a period of time.

Effective duration is a calculated measure of interest rate sensitivity, which would be affected by timing of expected cash flows from the securities due to maturity, coupon payments, changes in rates due to a rate step up or adjustment, offsetting short position or use of derivatives.

A security or fund with a duration of 5 would be expected to lose 5 percent for each one percent rise in interest rates.

 

[lawman]

It has been a good.fund over the long haul.

The effective maturity would reflect when the securities held are expected to be repaid or called on average. It is a period of time.

Effective duration is a calculated measure of interest rate sensitivity, which would be affected by timing of expected cash flows from the securities due to maturity, coupon payments, changes in rates due to a rate step up or adjustment, offsetting short position or use of derivatives.

A security or fund with a duration of 5 would be expected to lose 5 percent for each one percent rise in interest rates.

Thanks..I sold my largest bond mutual fund for a big loss but I think it had a longer duration and maturity. Seems to me like at this point I may as well hold on to this one since I have no plans to sell any shares..My thinking is that eventually my paper loss on this will go down if I hold it long enough.