QUICK DEFINITION
Roll-Down is the price or yield effect that occurs as a bond moves toward a shorter maturity point on an unchanged yield curve.
WHY IT MATTERS
Why Roll-Down matters in bond markets
Positive roll-down can add return to a bond position even if the overall curve does not move.
MARKET CONTEXT
How to think about it
Bond investors use roll-down 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 Roll-Down important for fixed-income investors?
← Back to the Bond Market Glossary Yes. Positive roll-down can add return to a bond position even if the overall curve does not move.