Convexity

Convexity is a measure of how a bond’s interest-rate sensitivity changes as yields change.

Why this matters to income investors

A bond’s nonlinear rate sensitivity changes price risk as yields move.

How to use convexity in your research

Read the security or fund documents, identify seniority and embedded options, and compare income with credit, liquidity, duration, and reinvestment risk.

This material is general education and information, not individualized investment, tax, or legal advice.