What is a bond ETF's duration and why does it matter?

Duration is a measure of how sensitive a bond ETF's price is to interest-rate changes. As a rough rule, a duration of 5 means a 1% rise in rates could lead to about a 5% price drop (all else equal).

This is why long-term bond ETFs can be surprisingly volatile. Even with low credit risk (like Treasuries), duration can drive large drawdowns when rates move quickly.

When choosing bond ETFs, match duration to your goal. Short duration is often used for stability, while longer duration can be used tactically or when you want more sensitivity to falling rates.