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Questions tagged [bonds]

Use this tag for questions that relate to debt instruments known as bonds. Generally, money is lent to governments or corporations that is paid back with interest.

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185 views

How to read WSJ US Treasury quotes

I am trying to understand how they calculated "asked yield". If anyone can explain it, I really appreciate it. I would like to see the mathematical formula and the calculation.
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419 views

How can I calculate the volatility(standard deviation) of a stock price? and/or ROI (return on investment) of a stock?

I'm trying to build my first portfolio, I've already have set out my monetary goals, graded my risk tolerance and determined the asset allocation I wanted to go with. So, now for the next step I need ...
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1answer
85 views

HYG vs JNK Popularity and Quality

Why is HYG more popular than JNK (respective AUMs are 20B and 13B) even though JNK has a lower expense ratio (0.49% and 0.40%, respectively)? It even seems that JNK's tracking error is lower than HYG'...
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2answers
72 views

Effect on Bond asset allocation if Equity markets crash?

Let's say "Tom" allocated a large amount of capital in some fund's (it's TIAA-CREF, actually) bond assets. In our fictional scenario 2 things are going to happen in the next year: The equity markets ...
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1answer
731 views

High Interest Savings Account vs Bond ETF

Which of the following is a better investment for long term investing and why? High interest savings account paying 2.3% interest, no account fees and the funds are protected by the Canada Deposit ...
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1answer
96 views

What affects bond value after an acquisition? [closed]

I have an academic question. If you are a bondholder and the company that issued the bond gets acquired what happens? I know that there are 2 possible paths: if there is a protection clause and if ...
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1answer
870 views

Live off of bonds as passive income?

Let's assume a person needs 3 thousand dollars for expenses (rent/food/etc) in one month and wants to invest in bonds to make passive income. How much money would he have to invest in bonds to make ...
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2answers
707 views

How to calculate the price of a bond based with a yield to Maturity, term and annual interest?

I'm trying to help my nephew with finance but I'm not sure if I fully understand if I have all the necessary details to answer this question. Here's the question: Say you want to purchase a 7%, 15yr ...
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1answer
66 views

Bond ETF NAV before dividends

This BlackRock page says that a bond ETF's NAV will fall by an amount equal to the dividend distribution when a dividend is paid out. I assume that means that the bond ETF's NAV rises as interest is ...
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1answer
98 views

Bond ETF Dividend Timing

Bond ETFs usually make monthly dividend payments. The ETF manager receives quarterly or semiannual coupons on the underlying bonds in the ETF. What is the time delay between the coupons received and ...
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3answers
3k views

What happens to Bonds if a company is bought out by a private equity firm?

If you have Corporate Bonds in a company and that company is bought out, by a Private Equity Firm. What happens to the bonds that were issued? Is the new Private Equity Firm responsible for that debt?
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1answer
683 views

Thorough Description of Yield to Maturity?

After some studies for the last month, I have encountered a concept that has just completely eluded me, and that is Yield to Maturity (YTM). Can someone explain the purpose and reasoning behind this ...
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1answer
440 views

Understanding bond margin, carry trade fundamentals

US Treasuries that have less than 6 months till maturity allow for 100x leverage, as the regulatory requirement is to put 1% of the market value down for each bond. So a $1,000,000 account could hold ...
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2answers
221 views

Futures and Bonds Pricing and Contract Terms

What do the listed futures price, say, here, actually mean? I am confused because my understanding of futures is that any two people can enter into a contract at any price with any delivery date. ...
2
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1answer
65 views

Can a bond ever be considered premium or discount if held to maturity?

I'm trying to understand bonds. I'm wondering if it is impossible to have a bond considered premium (or discount) if it is held for it's full maturity?
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1answer
206 views

What causes a saw-tooth like trend of a bond?

I'm curious why this bond (and likely many others) has a very regular pattern of vertical increases and decreases at what seems to me starts and ends of trading days. Visually it shows like a saw-...
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5answers
302 views

Are these really bond yields?

This is a screenshot from the top-level bond table on etrade.com, and I am having a hard time understanding it. I understand how bonds work, and what maturity/coupon/yield/etc are, but I'm not sure ...
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3answers
231 views

What are the chances of receiving interest when purchasing NS&I Premium Bonds in the UK?

I am considering buying 100 NS&I premium bonds, in the UK. Each $1 bond is automatically entered into a draw with a 1 in 30000 chance to win back what is effectively an interest payment*. My ...
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1answer
121 views

What is the meaning of “Debt has Support” regarding a bond?

On the Moody's sheet for every corporate bond I've seen there is a line that states whether the debt has support (Y or N). Can anyone tell me what this means or point me in the direction to find out? ...
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1answer
87 views

Yield curves and Bonds

Just struggling with putting the two together and google seems to be failing me. (1) Are the yields on yield curves annual continuously compounded rates, effective rates or something else like a "...
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1answer
126 views

Tax Free Zero Coupon Bonds and Taxes

I am an investor in Municipal bonds, including tax free zero coupon bonds. Imagine an investor buys a tax free zero coupon bond at 20 and then keeps the bond for 3 years and sells the bond at 15. He ...
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1answer
406 views

What happens when I buy Continuously-Callable bonds

I am looking at this bond: ILLINOIS ST GO 5% 04/01/2028 Callable (452152K59) Continuously-Callable on 07/04/2017 @ 100.00000 The price of this bond right now is $100.05000 (YTM=4.993%). In ...
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2answers
144 views

Should you sell your bond and buy one at a higher interest rate when interest rate increases?

Suppose you buy a bond 4% coupon 3 years at market rate with 4%.. In the first year you collected your coupon and interest rate rises to 5%. Value of your bond after 1st year: (40/1.05^2) + (1040/1....
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2answers
63 views

Ask value in the moment of maturity for bonds

Can a bond have a value above the nominal in the moment of maturity? For example, can a German Government Bond (nominal of 100%) that matures this month have a value of 120% for ask value? Or will it ...
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4answers
6k views

Opportunity to buy Illinois bonds that can never default?

Today Illinois bonds were downgraded to 1 above junk. The article. Citation from article: Despite the lack of a budget, Illinois has continued to cover payments due on its bonds, and, like other ...
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1answer
189 views

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 ...
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1answer
79 views

Income investing in rising rates environment

I have invested in bonds and REITS ETFs for income. But these investments probably will not do well if interest rates go up. Are there any investments that will do just fine or even benefit when rates ...
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1answer
67 views

Are all AAA ratings (from various credit rating agencies) equivalent?

I am peeking into holdings of various ultra-short term debt mutual funds (average maturity of bonds should be less than 1 year) and am coming up with AAA ratings of at least three different agencies: ...
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2answers
194 views

Which spot Treasury bond is used to calculate this high-yield spread?

The link below shows the BofA Merrill Lynch US High Yield Option-Adjusted Spread. I am trying to have a better understanding of high-yield bonds before I invest in them. https://fred.stlouisfed.org/...
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4answers
404 views

Does it make sense to compare the “returns” from debt payoff with long-term stock market investment returns?

I've been thinking long and hard about whether to pay off my student loans with the smaller interest rates as quickly as possible or just pay the minimums and start investing. After reading bunch of ...
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1answer
301 views

Does par value include interest?

Is it only the principal amount, original cost of the bond at the end of maturity date or does it include the whole sum with the interest payments?
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1answer
80 views

Diversification for large bond investments

I do all my investments with four index funds, and I currently have a fairly aggressive approach with 20% in a bond ETF (AGG) and 80% in three equity ETFs. As I get older, I'll put more money in ...
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1answer
100 views

money owed on transferred savings bonds

In May 1995 my grandfather purchased $11k in EE savings bonds. He died on July 20, 2008. My father transferred the bonds to himself and then from him to me in February 2015 (well, the papers were ...
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1answer
2k views

Are interest income from U.S bonds subjected to withholding tax like U.S dividends to foreigners?

Foreigners are subjected to 30% withholding tax on U.S stocks' dividends. Does the same withholding tax apply to U.S bonds? Any difference between the treatment for Treasury bonds and corporate bonds?
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1answer
371 views

Find the coupon date of a bond

Is there a way to tell when a bond will pay its coupon? I know there are bonds that pay annually and others pay twice a year, but can I know this (these) dates before actually buying the bond? This ...
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1answer
45 views

Which field should I use for getting the income yield of this bond ETF?

I am looking at "iShares Global Corp Bond UCITS ETF" listed on the London Stock Exchange. On the website for this bond ETF, there are fields like; "distribution yield" "flat yield" "Weighted Avg ...
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1answer
404 views

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 ...
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4answers
599 views

Should I use put extra money toward paying off my student loans or investing in an index fund?

The following is what I've written so far to examine and try to solve this dilemma I'm in of whether to put my extra money toward my student loan debt or invest it, which I'll be publishing on my site ...
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1answer
404 views

What are the ways compounding can occur from an investment in stocks and bonds?

I've been trying to understand the multiple ways stocks and bonds compound (under the definition of compounding as generating earnings from the reinvestment of previous earnings, my understanding of ...
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1answer
67 views

How does conversion of Secured Convertible Notes work?

Let's say a Company A has a public offering of $50 million in 7.0% Secured Convertible Notes that matures in 2021 to prospective investors with a conversion price of $2.00. For this example, let's say ...
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2answers
128 views

Zero Coupon Tax Free Bonds

I live in the United States. I believe that if an investor owns zero coupon tax free municipal bonds,the interest from their bonds must be reported on their tax return using the accrual method. Note ...
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1answer
3k views

How can I track TreasuryDirect savings bonds with Mint?

I have a pair of Series I Savings Bonds with TreasuryDirect. Is it possible to track their value using Mint? If so, what's the simplest way to do it?
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1answer
532 views

Tax obligations on POD savings bonds

I inherited series EE savings bonds, my name is in the POD (payable on death). What taxes am I obligated to pay? I know normally on bond you are taxed on the interest gained. But do I have to pay ...
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1answer
113 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 acheive risk parity because 80% of your risk is still in your ...
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2answers
212 views

Why would you sell your bonds?

I've been reading about bonds lately just for the sake of educating myself about investing opportunities for the years to come. Something I don't understand is that nearly every article goes to pains ...
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1answer
111 views

What investment is best? [closed]

I recently started a savings account that gets me .015% and a CD of .025%. I want to increase my investments as fast as I can. I don't want to go into stocks; I would prefer bonds and notes. What ...
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2answers
168 views

When to buy and sell bonds

I am trying to understand the concept of when to buy and sell bonds of countries. I am looking at Greek bonds. In the Financial Times newspaper there was a story saying "Athens' two year bond yield ...
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2answers
2k views

What's the difference between a bond priced at $100 and the same bond having a $1000 par value?

I understand that a bond priced at $100 (par) has a face value of $1000 (or a quantity of 1m). But I'm confused as to when these should be used in conversation. The nomenclature makes me assume there ...
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1answer
147 views

Does taxation of Treasury Inflation Protected Securities (TIPS) undermine their function as protection against inflation?

From this document from Vanguard: TIPS are taxed in a slightly different manner than conventional Treasury bonds. The periodic inflation-based “gross-up” in the principal of TIPS is taxed at ...
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1answer
410 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 ...