Curriculum says that curvature of yield curve will decline and then it says this “As a result, bonds at the ends of the yield curve will lose value or the intermediate bonds will increase in value. In either case, the bullet portfolio will outperform relative to a more diverse maturity index portfolio like the benchmark.”.
I understand part about intermediate bonds, but I dont understand why LT bonds will lose value because of less curvature?
The yields at the ST and LT could rise.