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Questions tagged [bond-etf]

Bond ETFs are exchange-traded funds that invest mainly in bonds.

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If US Treasuries at yielding 4-5% right now, why can't I find an ETF that yields that amount?

If US Treasuries at yielding 4-5% right now, why can't I find a 1 month US Bond ETF or 6 month US Bond ETF that yields 4-5%? The best I can find is SGOV but it only yields 2%. Picture of US yields on ...
Katsu's user avatar
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20 votes
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How do you short US Treasuries?

As the US government continues to issue record levels of debt, I don't think it can continue to sell that debt at 2 - 3% interest. It will face the simple supply/demand law of economics — the more ...
Muro's user avatar
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13 votes
4 answers
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Why doesn't my bond ETF provide a hedge against stock indexes in the way I thought it would?

I own BND in an attempt to hedge my portfolio against my stock ETF declines, based off of the Bogleheads philosophy. I've noticed that with this ETF, over the relative long term, I've made but modest ...
Ken - Enough about Monica's user avatar
12 votes
3 answers
2k views

Why does the yield on SHY (US treasury bond ETF) seem so bad?

With the US interest rate increasing so much lately, I am interested in putting some more of my money into US treasury bonds. I am looking at the SHY ETF on Fidelity, which is an ETF comprising short-...
Time4Tea's user avatar
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8 votes
1 answer
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Best way to invest in safe USD bonds for non-US citizens?

I'm a European resident (non U.S. Citizen), I receive my salary in USD. I have opened a USD account at my local bank to avoid exchange fees. I'm having difficulties in finding a decent way to invest ...
user14059's user avatar
6 votes
3 answers
2k views

Do bond funds have an inherent advantage over individual bonds within a portfolio?

Background: I am constructing a simple ETF portfolio consisting of 70% stocks and 30% bonds. Every three months, I will add money into the portfolio, and rebalance the portfolio to restore its 70/30 ...
Flux's user avatar
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6 votes
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What does DIST refer to in this equity ETF?

I am looking at this bond ETF "iShares MSCI Japan UCITS ETF USD (Dist)" which is listed on the London stock exchange. What does DIST refer to in this equity ETF? I cannot find the answer from the ...
curious's user avatar
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6 votes
1 answer
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Does buying bonds individually offer an advantage over bond funds/ETFs in a low interest rate environment because bonds can be held to maturity?

I have heard this argument several times. Today's low-interest rate environment makes it risky to own bond funds/ETF. Investors will be seriously injured when interest rates start rising ...
curious's user avatar
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5 votes
1 answer
1k views

Questions about bond ETF

What happens when a bond expires? Will the mangers typically buy similar bonds or will they payout the cash (and hence the bond ETF will have a natural expiration)? So the difference between ...
k.dkhk's user avatar
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4 answers
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Are bond index funds a safe way to save for a mortgage down payment?

I came across Betterment's "Smart Saver" account today, which is a savings-account alternative that invests in U.S. Treasury bonds and low-volatility corporate bonds. The APY is almost exactly the ...
Nosjack's user avatar
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5 votes
2 answers
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When are short-term US Treasury funds (ETF or mutual) a good investment?

I want to understand the rationale behind buying into a short-term Treasury ETF (or mutual fund). In particular, I want to understand how it compares to buying short-term Treasury bonds/bills directly ...
Betterthan Kwora's user avatar
4 votes
4 answers
1k views

Why are bond ETFs typically recommended for diversifying into bonds?

It seems that the conventional wisdom on portfolio allocation suggests that one should include a bond component in one's portfolio. The usual way that people gain exposure to bonds is by buying a bond ...
Flux's user avatar
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3 votes
3 answers
382 views

Understanding bond ETFs

I am failing to understand the bond ETFs. I somewhat understand stock ETFs: ETFs own stocks, I buy a part of ETF, therefore, I also indirectly own stocks. When I sell my share of ETF, the ETF gets ...
Danijel's user avatar
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3 votes
2 answers
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Criteria for selecting Bond ETFs

My investments are split between 4 ETFs (US, International, REIT, and bonds). Until recently, bonds were a relatively small part of the portfolio so I didn't put much thought into it and selected a ...
minou's user avatar
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3 votes
1 answer
538 views

Pros and cons of bond ETF versus traditional bond mutual fund?

Bond ETFs are easily available on stock exchanges today. Bond mutual funds have been around for a long time. I am not sure which to buy to build an income stream as a fixed-income investor. What are ...
curious's user avatar
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3 votes
2 answers
2k views

Tax in Germany on ETF, government bonds, stocks

I've heard Germany tax rate on ETF capital gains and dividends is Kapitalertragsteuer + Solidaritätszuschlag = 26.375% (assuming you don't want to pay church tax also) Is this tax rate the same on: ...
Marco Demaio's user avatar
3 votes
1 answer
124 views

What is the appeal of this Ultrashort Bond ETF with 3B net assets but no returns nor dividends?

For diversifying risk in my personal depot I came across advice for this bond ETF: iShares € Ultrashort Bond UCITS ETF (https://www.ishares.com/ch/institutional/en/products/258114/ishares-euro-...
user640916's user avatar
3 votes
1 answer
150 views

Money-market or cash-type ETFs for foreigners with U.S brokerage account

Non-US investors who have cash in their U.S brokerage accounts, say Interactive Brokers, will be subjected to U.S estate tax. What are some securities, ETFs that are close to cash that these foreign ...
curious's user avatar
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3 votes
1 answer
162 views

Why short (German) government bond futures?

Today, mainly out of curiosity, I went to a major ETF comparison website and sorted the short ETFs by market value. I was surprised when among the first few places in the list I found an ETF (LYX0FW) ...
B K's user avatar
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1 answer
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If TIPS yields are negative, why do TIPS ETFs have a positive yield?

I've heard that TIPs currently have a negative yield. But the VTIP ETF from Vanguard has a positive yield of about 1.2% right now. Why is that?
John's user avatar
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2 votes
2 answers
332 views

Bond ETFs as a means to achieve risk parity

Background One of the investors that I really look up to is Ray Dalio. He has stated that a 50/50 stock to bonds allocation does not achieve risk parity because 80% of your risk is still in your ...
The Gilbert Arenas Dagger's user avatar
2 votes
2 answers
664 views

Bond ETFs: Distribution yield vs YTM

I have a hard time reconciling the distribution yield of a bond ETF and its average yield to maturity. For example, for this ETF the distribution yield is 1.8%, but the average weighted YTM is 4.5% (...
mxk's user avatar
  • 299
2 votes
1 answer
158 views

Why oughtn't corporate bond ETFs (with credit rating ≥ BBB) replace government bond ETFs?

Please see the question in the title. Consider merely Corporate Bond ETFs trading in Canada with a minimum credit rating of BBB. My daredevil grandma in Toronto bought 70% equity and 30% bond ETFs, ...
user avatar
2 votes
1 answer
163 views

What determines the price of fixed income ETFs?

I am curious about what determines the value of fixed income ETFs? Is it the prices of bonds? The yields of bonds? Or the coupon of bonds? I know that prices and yields move in inverse directions. So,...
spindoctor's user avatar
2 votes
1 answer
78 views

Bond etf with duration range

How do they construct etf with say 2-3y duration. I would understand the idea is to create a basket of bonds with such duration and keep it for 2-3y until they all mature to realize the expected book ...
Medan's user avatar
  • 563
2 votes
1 answer
91 views

Advantages of target-maturity treasury bond ETFs vs. buying treasury bonds outright?

Consider a target-maturity bond ETF that holds only treasury bonds: iShares iBonds Dec 2029 Term Treasury ETF (NASDAQ: IBTJ). It has an expense ratio of 0.07% on already-low treasury bond yields. What ...
Flux's user avatar
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2 votes
1 answer
91 views

How is P/E ratio of a bond fund calculated?

According to the Google search of NYSEARCA: HYG, that fund has a P/E ratio of 20.89. Which makes no sense, since bonds have yields (this one currently returns 5.04%), not earnings. So, what does ...
RonJohn's user avatar
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2 votes
1 answer
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Can we mix different asset allocation funds (funds-of-funds) to obtain a custom percentage mix of equity to fixed-income assets?

Since 2018, Canadians (and Americans) have easy-access to an array of auto-rebalanced asset allocation funds. These "funds of funds" combine equity and fixed-income in different ratios, in ...
pf_init_js's user avatar
2 votes
1 answer
126 views

In Canada, why have inflation-protected bond ETFs underperformed short-term federal government bond ETFs?

I know that interest rates negatively correlate with bond yields-to-maturity, but does the lowness of interest rates (for the past several years) fully explain the underperformance of the inflation-...
user avatar
1 vote
2 answers
336 views

Why would an ETF tracking UK government bonds be losing money?

I'm confused by a chart of iShares Core UK Gilts UCITS ETF which is supposed to simply expose the customer to returns from UK bonds. Why does it show negative returns over the last 12 months, unless ...
Sideshow Bob's user avatar
1 vote
1 answer
207 views

When are bond ETF dividends taxed?

From what I've read, the dividends of bond ETFs (like HYG or JNK) are taxed at the ordinary income tax rate (up to 39.6%). Is this tax withheld before the dividend is paid out to the investor? Or is ...
trade_the_basis's user avatar
1 vote
3 answers
256 views

Does an owner of a bond etf get an income even if he sells before the day of distribution?

Suppose an investor owns a bond ETF for 1 month and sells without waiting for the date of income distribution, will he still get paid an income for owning the bond ETF for 1 month? This does not work ...
curious's user avatar
  • 2,175
1 vote
3 answers
197 views

Why bond ETF price rises over time?

I get that bond price can change depending on the current interest rate (since interest rate of the bond doesn't change). But if this were the only factor, price of the bond ETFs (like BND) would stay ...
maxc137's user avatar
  • 113
1 vote
1 answer
527 views

Are there Bond ETF’s that don’t go down? [duplicate]

I would like to put some percentage of my money in an investment that only goes up, even if it goes up only by a small amount. One way to do this would be to put my money in a bank account, but I’d ...
Keshav Srinivasan's user avatar
1 vote
1 answer
346 views

Bond ETF's: why isn't the nominal value of the underlying asset mentioned anywhere?

I am wondering why you never see the (weighted) nominal value of the underlying assets of a bond ETF mentioned anywhere. It seems to me this information is needed to determine whether a bond ETF is ...
Confusion's user avatar
  • 111
1 vote
1 answer
212 views

Putting down payment to work

We have planned to buy a house but with such high rates that did not happen. We would have to wait until rates are lower. I planned to use the down payment money to invest in Ig 3-5y corporate bonds ...
Medan's user avatar
  • 563
1 vote
1 answer
89 views

How does the market correct the price of government bonds ETF's? Does it?

A year ago I started to put some of my savings in investments, and to start safely, I bought eurozone government bonds ETF's. One year later, these are down 17%. At first I was astonished how that ...
doetoe's user avatar
  • 113
1 vote
1 answer
98 views

Vanguard 500 Index Fund ETF, fixed income? [closed]

It seems some ETFs pay dividends other are fixed income. How can I know the one I'm interested in (i.e. Vanguard 500 Index Fund ETF) pays dividends or have fixed incomes?
ebepem's user avatar
  • 75
1 vote
1 answer
244 views

How much of a bond ETF's dividends are tax-free for US non-resident aliens?

Normally, for US non-resident aliens, the withholding tax on dividends is 30%. However, dividends that qualify as "portfolio interest" are not taxed (i.e 0% tax). When a US domiciled bond ...
Flux's user avatar
  • 17.1k
1 vote
1 answer
91 views

Characterising risks of an corporate/goverment bond ETF's

I have been looking at different conservative investment strategies such as 50/50 "interest fund", "global stock fund" and "the permanent portfolio". As an alternative, I was looking for corporate ...
user123124's user avatar
  • 1,085
1 vote
0 answers
115 views

Should I invest in US bond ETF as a US Non-resident Alien? If so, how should I manage the bond portfolio?

I’m currently investing in US market using IBKR with 70% index ETF (QQQ, VOO, etc.) and 30% bond ETF split (only BND at the moment). I’ve done this for two years I’m aware that a 30% withholding tax ...
Royyyyy1's user avatar
1 vote
0 answers
224 views

Why do some monthly bond ETFs have no dividend in January?

For example, the following bond ETFs have monthly dividends except in January: 1) https://www.nasdaq.com/market-activity/funds-and-etfs/vteb/dividend-history: ------------...
Franck Dernoncourt's user avatar
1 vote
0 answers
544 views

Where can I find the European equivalent ETFs from a USD superdiversified 10 ETFs portfolio

I have been using this superdiversified 10 ETFs portfolio. To lower the risk it's composed from stocks and bonds across the globe and includes some commodities. Being in USD currency and the Euro ...
OlivierLarue's user avatar
0 votes
2 answers
73 views

Bond etf payment holding for short term

I've read that bond etfs pay a monthly dividend / coupon. What happens if you hold the bond for less than a month, or between dividend payments? What happens if you hold the bond just for the duration ...
Bharel's user avatar
  • 103
0 votes
2 answers
208 views

how to estimate bond ETF price once interest rate changes?

I'm looking at an example bond ETF which track bonds that expire on 2027 which means its for almost 10 years to its intermediate-term bond tracking. I understand that if interest rate would go up, ...
Jas's user avatar
  • 103
0 votes
1 answer
104 views

What does the Bloomberg US Treasury Long Term TR index measure?

I have purchased shares of a bond ETF, ticker symbol: SPTL (SPDR Portfolio Long-Term Treasury ETF). The prospectus states: "the fund's goal is to track the total return of an index that measures ...
domino's user avatar
  • 595
0 votes
1 answer
584 views

Do buyers of bond ETFs need to pay for accrued interest?

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 ...
curious's user avatar
  • 2,175
0 votes
1 answer
113 views

bond etf: stock or bond?

I have a question how bond etf works as I can’t understand all the mechanics. When I buy stock, I bet on its price appreciation. I assume higher volatility as it can go up and down but I am free to ...
Medan's user avatar
  • 563
0 votes
1 answer
139 views

What does a portfolio manager for an ETF do?

When I check a particular fixed income ETF it usually shows me the portfolio managers for it. May I ask what is their role? I think every ETF has a benchmark, say a bond index. Now the fund is ...
Medan's user avatar
  • 563
0 votes
2 answers
110 views

Can I buy some US treasury bills or notes ETFs (3 month to 5 years) with very low risk from the EU?

Can I buy some US treasury bills or notes ETFs (3 month to 5 years) with very low risk from EU (want to buy it in EUR so I don't have to convert it - would this even be a problem?). Because EU bond ...
klemsi123's user avatar