4.29%? Shouldn't market price have an inverse relationship with YTM? If the avg coupon is 2.35 and the share price of the ETF has increased significantly since the beginning, how can YTM be higher than the coupon, i.e. Two things that I still don't get - sorry for naive questions.ġ. So what's important is that the YTM at the point of purchase is already your final YTM and is what you'll be getting at maturity (save for a default): somehow I was under the impression that your YTM can change arbitrarily even after a purchase because of market price fluctuations, but that is not so considering that market prices converge to NAV. Thanks again, Saturnix, much appreciated! On the non-UCITS versions, this trivial calculation is even made for you: What my expected return is supposed to beĪverage YTM (listed on the website) - Fees - Price adjustment (difference between NAV and buying price) - taxes. One pays you the coupons, the other will reinvest them. But you're risking leaving a little bit of performance on the table.Īpart from this meaningless and obvious consideration, and tax implications. ![]() Why would it be? Dividend paying ETFs are slightly less risky, as you're constantly divesting a small sum. Is the risk profile of distributing and accumulating iBonds any different? Normally I only invest in accumulating (stock) ETFs because of taxes, but I'm not sure what to make of iBonds. Or follow this link in Chrome (first time I try highlight linking. It is listed, and also weighted by exposure. ![]() I also don't understand why I can view par values and coupons of all bonds in the ETF, but average par value is apparently not listed. It is, in theory, predictable, assuming no bonds will default or gets recalled. In the end, what I get is determined solely by NAV, and is not predictable? ![]() All the coupons and capital returns are paid to you, in proportion to your share of the fund. You're investing in a fund that holds bonds that will not expire later than 2025. If I buy an iBond share for x EUR today and hold to maturity, I thought that I should be getting a proportional amount of the average par value + average coupon at the end. I would greatly appreciate any explanation of these basics, so that as an individual investor I can have some idea of what my expected return is supposed to be and what to look out for when buying fixed maturity bond ETFs.
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