Title: Why is my bond fund down? - Financial Pipeline
Headings: Why is my bond fund down?
Why is my bond fund down?
Why do bonds lose value?
Why do interest rates have to rise?
What does this mean for your bond portfolio?
What you can do

Content: Everything in the bond market is driven off the government credit curve, or the rate at which people would be willing to lend money to the Government of Canada. That curve isn’t static. The government is constantly borrowing money from different players and that means the market moves and adapts, so the rate at which Canada can borrow money at changes every day. The government borrows money by issuing bonds, which once issued, can be traded. Those bonds and those trades create a market, where many bonds with different coupons live. A bond’s coupon is the percentage of interest paid on that bond over the course of a year. When you plot exactly what the cost would be for Canada to borrow money at each point in time (based on all the bonds that were issued) a yield curve – which is basically a graph detailing the yields-to maturity of all kinds of all outstanding Government of Canada bonds. But again, that graph isn’t static. The prices of these bonds will change based on things like Canada’s credit quality and where people think inflation is going. If it looks like inflation will go up, people are less likely to want to hold bonds, so the government of Canada will have to pay a higher interest rate to convince people to hold bonds.