Duration is a sensitivity measure: roughly how much a bond price changes for a 1% (100 basis point) move in interest rates. If duration is 6, a +1% rate move means roughly a -6% price move before any convexity correction. The higher the duration, the more the price reacts to rate changes in both directions.

No. Maturity is when the bond repays your principal. Duration measures price sensitivity to interest rate changes. Two bonds with the same 10-year maturity can have very different durations if their coupon rates differ — the one paying larger coupons returns cash sooner and therefore has lower duration. The one case where they match is zero-coupon bonds, where all cash arrives at the end so Macaulay duration equals time to maturity exactly.

Use modified duration for price sensitivity. Many ETF factsheets report "effective duration" — this is the practical sensitivity measure you want and the one this calculator expects. Macaulay duration is a weighted average time to cash flows, useful academically but less useful for direct price estimation.

Yes, as a good approximation. The ETF's reported duration reflects the portfolio's sensitivity today. Real outcomes can differ because the ETF continuously rolls bonds, reinvests coupons, and the yield curve can shift unevenly across maturities. Use the result as an order-of-magnitude estimate, not a precise prediction.

Convexity is a second-order correction that improves accuracy for larger rate moves. It slightly softens the duration estimate: making losses smaller when rates rise and gains larger when rates fall. For small moves under 50 basis points, convexity has minimal impact and you can safely leave it at 0. For moves of 150 basis points or more, adding convexity gives a more realistic estimate.

Not accurately. The calculator assumes positive convexity, which holds for plain government bonds and most broad ETFs. Callable bonds and mortgage-backed securities (MBS) can exhibit negative convexity: when rates fall, issuers refinance early or borrowers prepay, capping the price upside. If you input the effective duration from the fund's factsheet, the percentage estimate will be roughly directionally correct — but the convexity adjustment will understate the asymmetry specific to those instruments.

In 2022, central banks raised rates faster than they had in decades. Long-duration government bond ETFs lost heavily — in some cases more than equity markets — while short-duration and floating-rate funds held up far better. The difference was almost entirely explained by duration: same asset class, same credit quality, very different outcomes. It was a live demonstration of why duration is the key number to check before adding bonds to a portfolio.

Not for investors with a long enough time horizon. Rising rates hurt bond prices immediately — that is what this calculator estimates. But the same rate rise means coupons and maturing bonds can be reinvested at higher yields going forward. The rough rule: a portfolio's duration approximates the breakeven holding period after a rate shock. If duration is 7 and rates spike, roughly 7 years of higher reinvested income can offset the initial price loss. If your horizon is shorter than that, the rate risk is real and meaningful. If it is longer, you may ultimately benefit from the higher income that follows.

Duration is a single-number approximation of a complex relationship. Credit spreads, yield curve shape changes (parallel shifts vs twists), liquidity conditions, and fund portfolio turnover can all dominate in practice, especially over short timeframes. Use this calculator for stress-testing and planning, not precision forecasting.