Questions tagged [bond-funds]
63 questions
18
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1 answer
Why does the Morningstar overview of VMMXX say 81% cash?
I was reading about Vanguard's Prime Money Market Fund, VMMXX, whose investments are characterized thusly by Investopedia:
The holdings include U.S. Treasury bills (T-bills) with a 24.1% portfolio weighting, U.S. government obligations at 11.8%,…
temporary_user_name
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8
votes
1 answer
What happens to the bond ETF when the underlying bond matures
When a bond matures, what happens to the corresponding bond ETF? It still keeps on going as if nothing has happened. How does this work? I guess there is some kind of rolling over happening here, but how exactly?
Victor123
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8
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2 answers
How should I be investing in bonds as part of a diversified portfolio?
I often hear that I should diversify my investment portfolio with X% stocks and Y% bonds, ostensibly to mitigate the risk.
My question is what exactly this guidance means in terms of HOW to invest in bonds. For diversification purposes it seems…
JohnFx
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7
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5 answers
Are social/responsible stock funds pointless?
The ESG funds are becoming more and more popular. (ESG = Environmental, Social and Governance). But I am wondering if it makes sense for stock funds?
If you buy a stock fund, the only consequence is that you become a player on the stock market, but…
thyme
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6
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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 because funds/etfs have no maturity date. It’s much…
curious
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6
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3 answers
Does a bond etf drop by the amount of the dividend just like an equity etf
Usually a stock or an equity etf drops by the amount of the dividend on the ex dividend date.
Does the same rule apply to a bond fund or bond etf?
When a bond etf pays the quarterly dividend because the underlying bond(s) pay out coupons, will the…
Victor123
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6
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3 answers
How do I calculate the current risk involved with US Bond Index Funds?
For months I have been trying to wrap my head around the concept of risk involved with the US Bond Index Funds in my portfolio. My initial conclusion is that the risk of long-term damage to my portfolio at this point may warrant changing my asset…
tp9
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5
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4 answers
Should I scale down my 401k?
Today I met with my 401k provider at work. They tend to push certain plans and a schedule that is as follows:
Aggressive Fund (100% stocks, 0% bonds)
Moderate Fund (50% stocks, 50% bonds)
Conservative Fund (20% stocks, 80% bonds)
Aggressive…
Acumen Simulator
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5
votes
3 answers
What's the difference between buying bonds and buying bond funds for the long-term?
I know that if I buy a bond and hold to maturity, I will get the value plus the coupon.
If rates go up, the resale value of my bond will go down, and vice versa.
However, what happens if I buy into a long-term bond fund and rates go up? It seems to…
Jeremy T
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5
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2 answers
How do bond funds have a higher return that the sum of their bond parts?
In looking at bond funds recently, I've seen many that have a return of about 7% annualized over 5 years. However, their holdings are bonds that return 2-5% annualized. How is it possible that the bond fund returns a higher percentage than any one…
Brock
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4
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1 answer
What are the effects of interest rate changes on long-term bond ETFs?
I realize this question has been asked a bunch of different ways over the years, but I was hoping to get specific opinions on how a Fed interest rate increases will affect long term bond ETFs (i.e.- TLT or BLV).
This is one of the better / more…
jay
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4
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2 answers
What is the risk to a high-yield corporate bond fund versus an investment-grade corporate bond fund?
The yield for HYG, a high-yield (i.e. junk) corporate bond ETF, is currently 5.72% versus 3.56% for LQD, an investment-grade corporate bond ETF. Of course, higher yield generally means higher risk. But don't these yields already take into account…
Craig W
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4
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1 answer
Where can I find historic performance data on Barclays Aggregate Canadian Bond Index?
I'm looking at the Vanguard Canadian Aggregate Bond Index ETF (VAB), and it says it replicates the "Barclays Capital Global Aggregate Canadian Float Adjusted Bond Index". Unfortunately VAB is less than a year old, so to understand the historical…
Nayuki
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4
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1 answer
How to buy bond index funds only when they are mostly composed by higher interest rate (%) bonds
Vanguard states that their index funds are re-balanced every 4 months or when the management (exceptionally) considers it necessary.
I imagine the FED raising rates several times during 2022 and 2023 will make the Vanguard U.S. bonds index funds to…
Martel
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3
votes
1 answer
Comparing bank to bond ETF
Let's say I have a bank savings account giving this interest:
Rate: 1.736%
APY: 1.75% (rate accounting for compounding interest)
And there's a bond ETF SCHZ with these rates:
TTM: Distribution Yield Trailing 12 Month: 2.6%
SEC Yield 30 day:…
JoJo
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