What is Duration?
Duration is a measure, stated in years, of how sensitive a bond or bond fund's price is to a change in interest rates. A rough rule is that a duration of 8 means the price falls about 8% if rates rise by one percentage point, and rises about 8% if they fall by one. Longer maturities and lower coupons both push duration up.
Why Duration matters
It turns interest rate risk into one number you can compare across bonds and bond funds.