Roll-down is the capital gain that occurs when a bond's price increases toward its face value as it approaches maturity, driven by the natural decline in its yield over time.
This return is earned passively by the bondholder, assuming interest rates remain stable, and represents a profit generated simply by holding the bond through time rather than from active trading or interest rate movements.
How it works: When you buy a bond at a discount or premium to its face value, it must eventually converge to par (100) at maturity. As time passes and the bond "rolls down" the yield curve toward maturity, this convergence creates a predictable price appreciation, independent of any changes in market interest rat
