This Short-Term Bond Fund Provides Protection From Rising Rates

Pimco Low Duration Income fund plays defense against rising rates and delivers a decent yield.

At last, short-term bonds offer respectable yields that surpass 2%—and it only took six interest-rate hikes over three years by the Federal Reserve. With more increases to come, short-term bonds have an added bonus: Their prices sink less than those of longer-dated debt when interest rates rise (bond prices and interest rates tend to move in opposite directions). That's because short-term bonds typically have a lower duration, a measure of interest-rate sensitivity, than their longer-term counterparts.

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Ryan Ermey
Former Associate Editor, Kiplinger's Personal Finance

Ryan joined Kiplinger in the fall of 2013. He wrote and fact-checked stories that appeared in Kiplinger's Personal Finance magazine and on He previously interned for the CBS Evening News investigative team and worked as a copy editor and features columnist at the GW Hatchet. He holds a BA in English and creative writing from George Washington University.