{"id":4123,"date":"2024-11-07T12:59:37","date_gmt":"2024-11-07T11:59:37","guid":{"rendered":"https:\/\/valueinvestments.ch\/lexikon\/yield-curve\/"},"modified":"2025-01-07T10:48:30","modified_gmt":"2025-01-07T09:48:30","slug":"yield-curve","status":"publish","type":"lexikon","link":"https:\/\/valueinvestments.ch\/en\/lexicon\/yield-curve\/","title":{"rendered":"Yield Curve"},"content":{"rendered":"\n

What is a yield curve?<\/h2>\n\n

The word yield stands for the <\/strong>profit<\/a> or <\/strong>return<\/a> that can be achieved by investing in <\/strong>bonds.<\/a> can be achieved. The yield curve depicts these yields in a diagram <\/strong>. Dabei wird der Yield der Obligation in das Verh\u00e4ltnis zur Laufzeit der Obligation (F\u00e4lligkeit) gesetzt. Die Steigung der Kurve ist also ein Indikator f\u00fcr Zins<\/a>\u00e4nderungen, die Wirtschaftst\u00e4tigkeit und das Wachstum<\/a>. Sehr beliebt ist hier zum Beispiel die Yield Curve von Staatsanleihen. <\/p>\n\n

In general, the yield curve can take different forms<\/strong>. Normally, a longer term for bonds<\/a> should lead to a higher yield<\/a>, as the risk (e.g. credit risk) increases with the term. This therefore leads to a rising curve. However, there is also the case of the inverted yield curve and the flat yield curve. These two forms tend to occur in rare cases. As interest rates<\/a> change over a period of time, there is a risk that this could be to the detriment of the investor. As a rule, the price of a bond falls when market interest rates rise, and vice versa. This risk is also known as yield curve risk. <\/p>\n\n

Types of yield curves<\/h2>\n\n

The normal yield curve<\/h3>\n\n

As already mentioned, the normal yield curve slopes upwards. The yields<\/a> for bonds<\/a> with curved maturities are therefore rather low and increase with maturity. A shorter term is generally associated with less risk (default risk, inflation risk<\/a>) and therefore the yield is correspondingly lower. The illustration shows an example of a normal yield curve. <\/p>\n\n

\"Illustration<\/figure>\n\n

The inverted yield curve<\/h3>\n\n

The yield curve only takes on this form in exceptional situations. The inverted yield curve arises when a bond with a short maturity pays a higher yield<\/a> than a bond with a long maturity. The inverted yield curve is therefore tilted downwards. This shape of the yield curve indicates a recession. The central bank can also intervene in the system in times of inflation<\/a> and thus create an inverted yield curve. <\/p>\n\n

\"Illustration<\/figure>\n\n

The flat yield curve<\/h3>\n\n

This form of yield curve also represents an exceptional situation. With a flat yield curve, the bonds<\/a> have a similar yield<\/a> over different maturities. This shape of the yield curve can indicate an economic transition. The normal yield curve therefore moves towards an inverted yield curve, or vice versa. Accordingly, a flat yield curve indicates an uncertain economic situation. Due to this uncertainty, investors expect a similar yield regardless of the term. This form occurs, for example, at the end of a phase of high economic growth. If the central bank is expected to raise interest rates, the yield curve can also take on a flat shape. <\/p>\n\n

\"Illustration<\/figure>\n\n

The Humped Yield Curve<\/h3>\n\n

The humped yield curve initially rises with maturity. However, yields<\/a> fall again with long-term maturities. This shape often reflects the uncertainty of investors. <\/p>\n\n

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