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4
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2answers
68 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. ...
4
votes
3answers
98 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
votes
1answer
83 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 ...
0
votes
2answers
234 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
votes
2answers
530 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 ...
2
votes
2answers
194 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
votes
2answers
108 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
votes
1answer
2k 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
votes
3answers
232 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 ...
1
vote
1answer
101 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
votes
2answers
112 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 ...