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When I open any etf pages there are a lot of yields specified. I assume those are some averages of underlying bond yields. I want to know the total return on my money ytd. This consist of 2 parts: one is the price change as I am buying shares and the coupon payments. Is there a metric that combines both? Or how can I calculate the actual return I receive if I in ested 100 on a particular bond etf? Possibly there is a primer someone can point me to? I got confused with all the metrics.

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Total Returns are not guaranteed in a bond ETF, unlike an individual bond that has guaranteed coupons and a guaranteed redemption value (barring default). The bonds within the ETF will pay coupons to the fund, which get distributed periodically based on the terms of the ETF (meaning they are not required to distribute ALL interest). But the value of the bonds can go down, which means that the ETF is worth less when you go to sell it. So you may have a total return that is less than the periodically distributed return. Or, more precisely, you might get a fixed periodic return, but if/when you go to sell the fund you might have a capital loss. That periodic distribution can also go down if the ETF replaces bonds with ones that pay lower coupons.

There's no way to know what the total return of a bond fund going forward will be, so it's impossible to provide that as a metric.

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  • I am not trying to estimate future return. I want to know the total return for the last say year or YTD, is there a metric the combines the 2? I can see on the chart the price change but there should be also metric how much of coupons have been paid.
    – Medan
    Jul 28, 2023 at 14:31
  • Okay I see - most funds will give a "performance" chart that show the growth of 100 (or 1,000 or 10,000) over a certain time period, or show a "total return" percentage over 1, 3, and 5 years. Just like an equity fund, it will be inclusive of dividends (interest) and capital gains.
    – D Stanley
    Jul 28, 2023 at 14:49

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