Education . Fixed Income . 4 of 4
Read the duration, not the headline.
01
A repo move reaches your money through duration. Twenty five basis points is the same number for everyone. What it does to your NAV is set by how long the bonds you hold are.
02
The expected cut is already priced. Bonds trade off the curve, and the curve bought the cut weeks ago. Decision day pays only the surprise, the stance, and the guidance.
03
In a hybrid, the debt sleeve is the shock absorber, not the engine. If you moved in to catch the rate rally, you bought the wrong sleeve for the job.
The MPC meets the first week of June. The repo number will lead every headline. The number that moves your debt sleeve sits in 8 point grey type on page 4. Duration. Read that one first.
How a rate move flows through a debt sleeve
rupeecase.com/learn