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How does debt fund’s maturity roll-down help manage market risk

Updated : June 22, 2018 01:39 PM IST

The difference between equity and bonds is that in bonds there is a maturity date, and with the passage of time, the residual period to maturity comes down. This is known as maturity roll-down as the remaining maturity period is rolling down.
If there is an open-ended bond fund that is passively managed with maturity roll-down, investors may opt for it to gradually reduce interest rate risk.
How does debt fund’s maturity roll-down help manage market risk
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