lawman
Thinks s/he gets paid by the post
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?
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.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.