Easiest way to think of bonds with interest rates is to imagine yourself owning an individual bond.
If you own a 5 year bond paying 3%, and tomorrow the company/government issues an identical bond paying 4% then no one wants your bond. You have to sell it at a discount.
If the bond matures in 6 months who gives a ^%^$? No one, and your bond's price isn't going to change much.
If the bond matures in 30 years that is 30 years of payments that are suddenly worth less. That bond is going to take a big hit.
So when interest rates rise short term bonds take a smaller hit than long term bonds.
You measure how sensitive a bond is to interest rates by looking at its duration. It is represented in years, ex. 5.5 years. All other things being equal you want a lower duration. When you are looking at bond funds the duration basically shows you how long you have to own the bond fund to benefit from rising interest rates. If the duration is 5 years and you own it for 4 you are going to take a hit from the rising interest rates, and not really get anything in return. If the duration is 5 years, and you own it for 7 then sure you take a hit from the rising rates but as the existing bonds mature and get replaced by new bonds with higher yields you benefit and actually earn MORE than if interest rates had stayed the same the entire 7 years.
Example: interest rates go from 3 to 4%. The existing 3% bonds drop in value in the short term, but when they mature the fund company starts buying 4% bonds. Over time earning 4% instead of 3% makes up for the drop you experienced early on, and you actually end up profiting from the change.