BLV: Long-Bond Yields At 2002 Highs, But Duration Risk Remains

What happened: The Vanguard Long-Term Bond ETF (BLV) fell about 12% over 12 months as the 30-year Treasury yield touched 5.62%, its highest level since 2002, and the Fed raised rates in September. Key numbers: 12% 12-month decline; 30-year Treasury yield 5.62%, highest since 2002; duration about 13 years; each 50 bp yield move shifts price roughly 6.5%; 53.5% Why it matters: With duration of about 13 years, the fund's risk is mainly rates rather than credit, so long-term yield moves drive price changes. The portfolio holds 53.5% Treasuries with the rest mostly A and BBB-rated corporates.

Long-bond yields at 2002 highs signal duration risk for fixed-income investors.

Long-bond yields at 2002 highs signal duration risk for fixed-income investors. — impact context not separately stored; see What changed.