QUICK DEFINITION
Carry is the income or return generated from holding a position over time, excluding changes in its market price.
WHY IT MATTERS
Why Carry matters in bond markets
Carry is a major component of fixed-income returns but can be overwhelmed by adverse moves in yields or spreads.
MARKET CONTEXT
How to think about it
Bond investors use carry as part of a wider framework that links prices, yields, cash flows, liquidity and risk. The concept should therefore be read together with its related terms rather than as an isolated definition.
Is Carry important for fixed-income investors?
← Back to the Bond Market Glossary Yes. Carry is a major component of fixed-income returns but can be overwhelmed by adverse moves in yields or spreads.