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61 views

Municipal Bond Fund tax risks?

I am looking at Tax-Exempt Municipal Bond Fund as a hassle free investment option. This is the first time I'm looking to invest outside of a retirement account, and having read up on the process of ...
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1answer
35 views

No maturity, for bonds in ETFs or bond ETFs?

1. User Chris W. Rea answered: When interest rates rise, the market value of 20-year bonds will drop, and drop more than shorter-term bonds would. Your principal is not protected in the short ...
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0answers
20 views

Bond funds' interest rate risk profile

[Source:] If you have a specific date to spend your money, a bond fund has a different interest rate risk profile: If you have a 10 year bond and interest rates spike 1% with half a year to ...
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1answer
53 views

Are Bond funds a good idea [closed]

How should one mitigate losses of last week? I am concerned but tend to move to quickly
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1answer
302 views

What happens to the bond ETF when the underlying bond matures

When a bond matures, what happens to the corresponding bond ETF? It still keeps on going as if nothing has happened. How does this work? I guess there is some kind of rolling over happening here, but ...
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0answers
133 views

Effects of interest rate changes on long term bond funds

I realize this question has been asked a bunch of different ways over the years, but I was hoping to get specific opinions on how a Fed interest rate increases will effect long term bond ETFs (i.e.- ...
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2answers
166 views

How should I be investing in bonds as part of a diversified portfolio?

I often hear that I should diversify my investment portfolio with X% stocks and Y% bonds, ostensibly to mitigate the risk. My question is what exactly this guidance means in terms of HOW to invest ...
4
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2answers
148 views

What is the risk to a high-yield corporate bond fund versus an investment-grade corporate bond fund?

The yield for HYG, a high-yield (i.e. junk) corporate bond ETF, is currently 5.72% versus 3.56% for LQD, an investment-grade corporate bond ETF. Of course, higher yield generally means higher risk. ...
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3answers
130 views

What's the difference between buying bonds and buying bond funds for the long-term?

I know that if I buy a bond and hold to maturity, I will get the value plus the coupon. If rates go up, the resale value of my bond will go down, and vice versa. However, what happens if I buy into ...
2
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1answer
121 views

Are capital gains tax-free in a Vanguard tax-free fund?

I own shares of the Vanguard New York Long-Term Tax-Exempt Fund (Admiral Shares)(VNYUX). I'm wondering exactly what is tax-free about it. The link says that the "interest income" is tax-free ...
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2answers
384 views

Does dollar cost averaging into a bond fund mitigate rising interest rate risk?

Everyone says not to buy bonds now because interest rates will rise. I'm wondering how dollar cost averaging (and reinvesting returns) helps reduce the risk. I'm not sure how bond funds work in ...
2
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2answers
1k views

What do the terms par value, purchase price, call price, call date, and coupon rate mean in the context of bonds?

I am having a hard time understanding municipal bonds. What is the par value vs. purchase price? What is the call date? What is the call price? The coupon rate is just the interest paid out to you ...
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2answers
199 views

How is investing in a bond fund different than investing in a stock?

You don't have the option to "hold it till maturity", so you are invariably exposed to interest rate risk, and as a consequence, you will probably gain or lose on your principal in the end. Isn't it ...
5
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2answers
113 views

How do bond funds have a higher return that the sum of their bond parts?

In looking at bond funds recently, I've seen many that have a return of about 7% annualized over 5 years. However, their holdings are bonds that return 2-5% annualized. How is it possible that the ...
4
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1answer
3k views

Where can I find historic performance data on Barclays Aggregate Canadian Bond Index?

I'm looking at the Vanguard Canadian Aggregate Bond Index ETF (VAB), and it says it replicates the "Barclays Capital Global Aggregate Canadian Float Adjusted Bond Index". Unfortunately VAB is less ...
6
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3answers
258 views

How do I calculate the current risk involved with US Bond Index Funds?

For months I have been trying to wrap my head around the concept of risk involved with the US Bond Index Funds in my portfolio. My initial conclusion is that the risk of long-term damage to my ...
2
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1answer
111 views

Understanding bond funds returns

I'm trying to get a sense for what to (very roughly) expect in terms of bond funds return on investment as compared to a guaranteed investment, like CDs. Here is an example fund and its reported ...
2
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2answers
124 views

How does one make money with a bond fund?

I have looked at the "What is a bond fund?" question and this wasn't addressed. Which of these are applicable (and is there anything tricky to understand about it in this case)? You can sell your ...