First, the difference between long-term and short-term
Long-term stock varieties include long-term closed-end stock funds, forward delivery stock index futures and B-share and H-share arbitrage without agreed convergence time. Short-term varieties are divided into short-term varieties of debt and short-term varieties of stock. Short-term varieties of debt include cash management, short-term corporate bonds, short-term convertible bonds, short-term closed-end bond funds and graded funds. A. Short-term varieties of stocks include short-term closed-end stock funds, recently delivered stock index futures, short-term stock arbitrage and fund arbitrage.
Second, the price of stock investment varieties
To maintain the correlation with the overall trend of the stock market, whether it is long or short, it is impossible to absolutely avoid losses, but the ability to obtain relative returns is different. Short-term stock varieties have shorter holding period, better liquidity, better certainty of price convergence, and can obtain relative returns stably, and do not need to bear excessive market price fluctuations, such as LOF redemption arbitrage, only need to bear the stock market price fluctuations for one day, and the relative returns (discounts) will also be collected within one day. However, long-term stocks have a long holding period, and the price distortion will even expand in the short term, such as the discount rate of closed-end funds.
To sum up, duration is a risk concept, not a terminology concept. Under normal circumstances, the long-term return should be high, but there are also cases where the yield curve is reversed, that is, the short-term return is higher than the long-term return. When calculating the duration, the numerator is the cash flow weighted by time, and the denominator is the factor discounted by yield to maturity. When the yield to maturity is low, the denominator is small, so the duration is generally longer.