8

"Dist" is short for "Distributing" and means that income from the underlying instruments is distributed to holders of the ETF every so often. For bond funds this income would be interest or "coupons" on the bonds, and for equity funds the income would be dividends, but either way the end result is the same. The alternative, "Acc" ("Accumulating") means that ...


8

Bond ETFs are just another way to buy a bond mutual fund. An ETF lets you trade mutual fund shares the way you trade stocks, in small share-size increments. The content of this answer applies equally to both stock and bond funds. Feature Mutual Fund ETF __________ ____________ ...


6

I wrote about this a while back, and it boils down to risk profile. If you hold the bond to maturity, then you minimize your capital risk: if you bought a $1,000 bond, once it matures, you are guaranteed the capital back (i.e., your $1,000). However, with a bond ETF, because the ETF is made up of underlying bonds, if interest rates go up, the aggregate ...


6

Is this tax withheld before the dividend is paid out to the investor? Only if you've been naughty. https://www.irs.gov/taxtopics/tc307 Topic Number: 307 - Backup Withholding When it applies, backup withholding requires a payer to withhold tax from income not otherwise subject to withholding. You may be subject to backup withholding if you fail to provide a ...


6

I handle bonds similar to how I do stocks, which is to say I assume the rest of the market knows more than me, so I pick the cheapest, most generic index funds available. Just like I don't overweight small caps or mid caps or large caps, I don't overweight Treasuries or municipal bonds or corporate bonds. So AGG is a great choice for me, as is BND at ...


5

Bonds can be bought and sold prior to maturity. If you download the holdings of an ETF from the manager's website, it will often include the prices of the bonds the fund holds. The price depends on how interest rates have changed. All else equal, I would pay more for a treasury bond with a 5% coupon than for one with a 4% coupon. The prices of the two ...


5

Bonds are great because you get that guaranteed return, ignoring defaults. You buy $1,000 of tomorrow money for $990 today. Bond funds, are different. Bond funds constantly transact bonds within certain risk and duration profiles and bond values have an inverse correlation to interest rates. If interest rates fall the principle value of your holdings in ...


4

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.).


4

I've been doing some research on this, and found a great answer on a Bogleheads forum: I think the value of bond diversification is frequently over-estimated by simple (and flawed) analogy with stocks. Bonds are most definitely not stocks. First off, in fixed income we have several assets that are for all intents and purposes 100% safe: ...


4

When I sell my share of ETF, the ETF gets the cash by selling the shares it owns. Is this the right thinking? No. Selling your ETF shares is just like selling any other security. They are purchased by a buyer and cash is exchanged. When an ETF company wants to create new shares of its fund, it uses an authorized participant (AP) who acquires the ...


4

AFAIK, the Kapitalertragsteuer doesn't distinguish different types of capital gains, so, yes, all the same. That being said, there may be differences with ETFs (you may have to pay withholdings on the capital gains tax if the capital gains are automaticaly reinvested) If your marginal tax rate is below those 26.357 %, you can ask the tax office in your ...


3

The German capital gains tax is flat for all kinds of capital gains. Capital gains are just one kind of income that you might have, besides other kinds of income such as employment, trade, forestry, and so on. However, the flat capital gains tax replaces the progressive income tax. Capital gains tax is usually due when value gains are realized, e.g. by ...


3

You would need to see the weight of each position in the fund. Then you just calculate the price change of each bond and calculate according to weight. Formula for each bond i attached from investopedia


3

Why oughtn't corporate bond ETFs (with credit rating ≥ BBB) replace government bond ETFs? Because BBB bonds (on the S&P scale) are near the bottom of investment grade bonds, while Canadian government bonds are near the top of the scale. That's why.


3

How is it possible that long term treasury bonds, which the government has never defaulted on, can hold more risk as an ETF then the stock market index? The risk from long-term bonds isn't that the government defaults, but that interest rates go up before you get paid, so investors want bonds issued more recently at higher interest rates, rather than your ...


3

Securities and ETFs are also subjected to Estate Tax. Some ways: Draft a "Transfer on Death" instruction to the broker, that triggers a transfer to an account in the beneficiary's name, in most cases avoiding probate. If the broker does not support it, find another broker. Give your brokerage and bank password/token to your beneficiary. Have him transfer ...


3

The thing you're wanting to avoid, which you called "interest rate risk", has the formal name of duration risk. It's actually calculated as (effective duration * interest rate volatility), but it's named after the duration rather than the interest rate. That also tells you how to minimize it. Choose a fund with an extremely low effective duration. The ...


3

Based on the prospectus - it is supposed to distribute income, but there apparently has not been any income to distribute - probably because short-term government interest rates in EUR have been negative (not just "very low") for a while. I can't see any reason to invest in this ETF from an individual investor's perspective Longer-term investors might ...


2

A simple search shows this not to be the case: Consider the iShares J.P. Morgan $ EM Bond UCITS ETF. Browse to the bottom of the page to find a link to detailed holdings and analytics, which gives it full position as of 21st Jun 2018. I suspect they have similar for all their EFTs. https://www.ishares.com/uk/individual/en/products/251824/ishares-jp-morgan-...


2

It's easy to compare the ETFs you mention vs savings accounts so lets start there. The first thing to notice is the differences in yield on short term treasury ETFs vs high yield savings are not huge but large enough to be noticeable over time. As you mentioned the price of those ETFs can fluctuate but they fluctuate such a tiny amount (say compared with ...


2

Yes, makes no sense. Other sources like Yahoo Finance or Bloomberg don't show P/E for HYG, as one would expect. Only thing that comes to mind is that the figure 20.89 roughly corresponds to the yield (1/20.89=4.79%), so most likely the computers came to this P/E by dividing NAV by interest income for some period, but who knows what the exact calculation ...


2

The literal answer to your question 'what determines the price of an ETF' is 'the market'; it is whatever price a buyer is willing to pay and a seller is willing to accept. But if the market price of an ETF share deviates significantly from its NAV, the per-share market value of the securities in its portfolio, then an Authorized Participant can make an ...


2

The key measure you are looking for is the effective duration of the fund. The effective duration of the fund indicates how much the value of the fund will change with every 1% change in interest rates. The longer the duration, the more sensitive the fund (or bond) is to interest rate changes. For the bond fund you quote, today the effective duration is 7....


2

You can't currently buy a bond that matures in Dec 2029 directly from the US Treasury. 10-year bonds that are being sold now mature in May, 2030. Dec 2029 bonds are now "off-the-run" and are only sold in secondary markets. Also, since interest rates have declined since these bonds were issued in Dec, 2019, you'll probably may more than par for the bonds, so ...


1

Here's an example for the fixed income payout of a preferred stock: The current interest rate is 3% so if the current price (CP) is $25 then the interest/dividend is 75 cents. INT/CP = .03 or INT = .03 * CP If the interest rate becomes 4% and FP is the future price then: INT/FP = .04 or INT = .04 * FP Solve the equations and you have: FP = 3/4 * CP ...


1

That's not exactly how bond ETFs work, but it's not far off. The bond coupons are not directly returned to the ETF holder; some of them are retained by the fund to buy new bonds (and to pay fees, of course). How much the fund pays in dividends is up to the fund manager. If you buy a single bond, you can still "lose money" in the sense that the bond will ...


1

The controlling party owns a wide range of short and long-term bonds. Both commercial and federal. They also likely own higher-risk bonds that pay a higher coupon rate. So like a stock ETF, you just purchase shares of the ETF and you own a portion of all those different bonds. The bond ETF pays dividends, or modified coupon rates to you each month. So let's ...


1

Brokers will have transaction fees in addition to the find management fees, but they should be very transparent. Brokering is a very competitive business. Any broker that added hidden fees to their transactions would lose customers very quickly to other brokers than can offer the same services. Hedge funds are a very different animal, with less regulation, ...


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