AboutJohn D Smith, CFP Expertise I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related financial planning/investment issues. I have a B.S. degree in Financial Planning & Counseling. I am also a Certified Financial Planner practitioner and have performed fee only investment management and financial planning services for the past 11 years.
Question What types of mutual funds perform better if interest rates increase?
Answer On the fixed income side, it will be shorter term instruments as there is an inverse relationship between a bonds duration and interest rate movements (i.e. interest rates go up and bond priced go down; the longer the duration the more the sensitivity to interest rates). In regards to stocks and other investments, it really depends on why interest rates are going up. If you have scneartios that you want to run past me I would be happy to offer further assistance. I hope this helps.
