pickup

Pickup

A gain in yield made by selling one bond and buying another. Also referred to as "yield pickup."

Notes:

When the present yield is relatively low compared to the longer-term yields, pickups will be done by investors trying to increase the yield and duration of their fixed income holdings. It is an important strategy for investors seeking a steady flow of income.

See also: Bond, Bond Ladder, Fixed-Income Security, Yield, Yield Curve, Yield Pickup

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Pickup

The gain in yield that occurs when a block of bonds is swapped for another block of higher-coupon bonds.

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pickup

A gain in yield that is achieved from swapping bonds. For example, a pickup of 30 basis points comes about when bonds with a 9.70% basis are traded for bonds with a 10.00% basis.