---
title: "Duration (modified / effective)"
description: "Duration measures how sensitive a bond fund's value is to interest rates: a modified duration of 5 implies roughly a 5% price fall for a one percentage point rise in yields."
canonical: https://fundfactsapi.com/glossary/duration
published: 2026-09-04
updated: 2026-09-04
publisher: FundFacts API
---

# Duration (modified / effective) (Modified duration, Effective duration, Macaulay duration, Interest rate sensitivity)

> Duration measures how sensitive a bond fund's value is to interest rates: a modified duration of 5 implies roughly a 5% price fall for a one percentage point rise in yields.

## Definition

**Duration** is the weighted average time, in years, until a bond's cash flows are received, weighted by their present value. That basic form is **Macaulay duration**. **Modified duration** divides it by one plus the periodic yield and gives a direct price sensitivity: for a small parallel shift in yields, the percentage price change is approximately minus the modified duration times the change in yield. **Effective duration** is computed by shifting the yield curve and repricing, which correctly handles bonds with embedded options such as callable bonds and mortgage-backed securities. A fund's duration is the weighted average of its holdings.

## Why it matters

Duration is the single most useful number for understanding a bond fund's interest-rate risk. A fund with duration 7 will lose roughly 7% if yields rise one percentage point across the curve, before income. Short-duration funds are less rate-sensitive but usually yield less. Combined with [credit quality](https://fundfactsapi.com/glossary/credit-quality) and [yield to maturity](https://fundfactsapi.com/glossary/yield-to-maturity), it describes most of what differentiates bond funds.

## In the API

The headline figure is `headlineMetrics.modifiedDuration`, a summary label sits in `profile.rateSensitivity`, and the maturity breakdown in `maturity`. Example values:

```json
{
  "profile": { "rateSensitivity": "medium" },
  "headlineMetrics": { "modifiedDuration": 6.4, "yieldToMaturity": 3.9 },
  "maturity": [{ "label": "5-10 years", "weight": 41.2 }]
}
```

## Common pitfalls

Duration is not maturity: a portfolio with average maturity of 10 years can have duration of 7 because coupons arrive earlier. The linear approximation breaks down for large yield moves (convexity). Fund houses may publish modified or effective duration without saying which; for portfolios without optionality the difference is small.

## In the FundFacts API payload

- `headlineMetrics.modifiedDuration`
- `profile.rateSensitivity`
- `maturity`

## About FundFacts API

FundFacts turns any fund or ETF ISIN into one dated factsheet (fees and KID costs, the 1–7 risk indicator, holdings, sector and country exposure, returns) read from the fund house's own documents: as a client-ready PDF under your firm's name for advisers and wealth managers, as JSON through its API for developers, or inside ChatGPT and Claude through its MCP server.

FundFacts works inside ChatGPT and Claude as a connector (a remote MCP server): ask about any fund or ETF by ISIN, ticker or name and the assistant answers from FundFacts' dated figures, fees, risk, holdings, exposure and returns, with fund cards, side-by-side comparisons, holdings overlap and portfolio look-through.

- Free API key, no card: https://fundfactsapi.com/signup
- Documentation: https://fundfactsapi.com/docs (OpenAPI: https://fundfactsapi.com/openapi.json)
- MCP server: https://fundfactsapi.com/api/mcp (set-up for every client: https://fundfactsapi.com/mcp-server)
- Pricing: https://fundfactsapi.com/pricing
- Site index for AI assistants: https://fundfactsapi.com/llms.txt
- Informational data, not investment advice.