I am a beginner, I have possessed public debt bonds only, so far. Recently I decided to differentiate my savings on some form of ETF, specifically on Moneyfarm, just to give it a try. Now, I am trying to understand if the coupons are paid and potentially how they are, in the case of ETF. In my specific case, I have been using Moneyfarm for some months now and I saw that in my ETF wallets there also are coupon bond. How they are usually paid if they are? Thanks.

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    As a beginner, the first thing you should do is reading books, go study basic investment (The intelligent investor) and behaviour economic (Thinking, fast and slow; Misbehaving ) instead of rushing into the market. As Daniel Kahneman pointed out that some study show most financial advisors are no better or perform worse than a well-informed investor. – mootmoot Aug 22 at 7:27
  • Thank you, I really appreciate your comment, as I said I am a beginner and I'm studying the field compatibly with the free time I have from my actual job as a software developer. I am not just rushing into the market and I am investing at the lowest risk of the MIFID interview with the only purpose to avoid having a little capital consumed by inflation. – Pendo Ilari Aug 22 at 10:09
  • In "Misbehaving", Richard Thaler has mentioned peculiar behaviour of investing in the bond fund: why invest in the bond that either than 50 years to double or taking high-risk buying junk bond,? When you already know S&P 500 index ETF will not go bankrupt and give you good return in the long run. – mootmoot Aug 22 at 15:44
  • @mootmoot That seems an odd thing to discount. You mention index funds "give you good return in the long run". I always used bond funds much like short term money market, for briefly holding money that will later be used for something else and should not dramatically lose value short term... – Vality Aug 22 at 18:48

The coupons from the bonds the ETF holds go into the cash balance of the ETF. From there, it's up to the terms of the ETF whether to pay dividends (which may or may not correspond to the coupons it has received) or to reinvest the coupons internally.

In other words, the coupons that the bonds held by the ETF pay are NOT distributed to you directly.

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