Duration is the multiplier between a rate move and your NAV.
A repo cut does not reach your money directly. It reaches it through how long the bonds you hold are. Same 25 bps fall, six different debt sleeves.
Debt fund type
Mod duration
NAV on a 25 bps fall
25 bps
The same rate move on every single row.
75x
The spread in NAV impact, top row to bottom.
1
The number that decides it all. Duration.