When buying normal bonds, the buyer needs to take note of accrued interest. He should take note whether the price quoted is a clean (excludes accrued interest) or dirty price (includes accrued interest). How about buyers of bond ETFs? Do they need to take note of the accrued interest before buying? I tried googling and am still confused at this point.
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1What is the difference between this and money.stackexchange.com/questions/53851/… ? Other than getting extra attention– base64Commented Sep 26, 2015 at 11:54
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1@base64: The two questions seem completely different to me. One is asking about bond ETF payments, the other is asking about bond ETF price. Yes, both are about bond ETFs, but they seem to be very valid questions to have about bond ETF investment.– Peter K.Commented Sep 26, 2015 at 16:32
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1Agreed, different question.– JTP - Apologise to Monica ♦Commented Sep 29, 2015 at 16:48
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1 Answer
No. Investors purchase ETFs' as they would any other stock, own it under the same circumstances as an equity investment, collecting distributions instead of dividends or interest. The ETF takes care of the internal operations (bond maturities and turnover, accrued interest, payment dates, etc.).
