DEFINITION of 'Long Bond'

The 30-year U.S. Treasury Bond. The long bond is so called because it is the bond with the longest maturity issued by the U.S. Treasury. It pays interest semi-annually, and is the most actively traded bond in the world. Because it is backed by the full might of the U.S Treasury and has a low default risk, the long bond is considered one of the safest securities around.

BREAKING DOWN 'Long Bond'

Like all U.S. Treasuries, the long bond attracts very substantial interest from overseas buyers during uncertain times in the global economy. The yield on the long bond has declined very significantly since 2000, and its price appreciation over this time frame has resulted in well above average returns for investors. The longer maturity of long bonds also makes them more vulnerable to rising interest rates than treasuries with shorter maturities.

RELATED TERMS
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with ...
  2. Bond

    A bond is a fixed income investment in which an investor loans ...
  3. Fixed-Income Security

    A fixed income security is an investment that provides a return ...
  4. Discount Bond

    A discount bond is a bond that is issued for less than its par ...
  5. U.S. Savings Bonds

    A U.S. savings bond is a government bond that offers a fixed ...
  6. Bond Yield

    The amount of return an investor will realize on a bond. Several ...
Related Articles
  1. Investing

    IEI: iShares 3-7 Year Treasury Bond ETF

    Take a closer look at the iShares 3-7 Year Treasury Bond ETF, which is a BlackRock issue focused on intermediate maturity government bonds.
  2. Financial Advisor

    Get This: Bonds Beat Stocks After All

    Data shows that long-term Treasury securities have actually outperformed the S&P 500 over the past 10 years.
  3. Investing

    Investing in Bonds: 5 Mistakes to Avoid in Today's Market

    Investors need to understand the five mistakes involving interest rate risk, credit risk, complex bonds, markups and inflation to avoid in the bond market.
  4. Investing

    An Introduction to Individual Bonds

    Individual bonds are better than bond funds and can be a key component to one’s investment strategy.
  5. Investing

    Top 6 Uses For Bonds

    We break down the stodgy stereotype to see what these investments can do for you.
  6. Investing

    Understanding Treasury Yield

    Treasury yield refers to the return on an investment in a U.S. government debt obligation, such as a bill, note or bond.
  7. Investing

    U.S. Corporate Bonds: The Last Safe Place to Make Money

    There aren't many other sources right now for relatively safe, steady income.
  8. Investing

    How Bond Market Pricing Works

    Learn the basic rules that govern how bond prices are determined.
  9. Financial Advisor

    Advising FAs: Explaining Bonds to a Client

    Most of us have borrowed money at some point in our lives, and just as people need money, so do companies and governments. Companies need funds to expand into new markets, while governments need ...
  10. Investing

    Explaining Government Bonds

    A government bond is a debt security a government issues.
RELATED FAQS
  1. Why are treasury bond yields important to investors of other securities?

    Learn about the wide-ranging impact of U.S. Treasury Bond yields on all other interest-bearing instruments in the economy ... Read Answer >>
Hot Definitions
  1. Covariance

    A measure of the degree to which returns on two risky assets move in tandem. A positive covariance means that asset returns ...
  2. Liquid Asset

    An asset that can be converted into cash quickly and with minimal impact to the price received. Liquid assets are generally ...
  3. Nostro Account

    A bank account held in a foreign country by a domestic bank, denominated in the currency of that country. Nostro accounts ...
  4. Retirement Planning

    Retirement planning is the process of determining retirement income goals and the actions and decisions necessary to achieve ...
  5. Drawdown

    The peak-to-trough decline during a specific record period of an investment, fund or commodity. A drawdown is usually quoted ...
  6. Inverse Transaction

    A transaction that can cancel out a forward contract that has the same value date.
Trading Center