Thanks.Distributions were about 2% annualized when it was issued. 10-year corporates were paying about 2.4% per FRED (https://fred.stlouisfed.org/series/HQMCB10YR).The average coupon is 3.45 so I guess it was close to that.I guarantee IBDV2030 was not yielding 5% when it was issued in 2020. The price went down and the yield went up. The current yield includes both coupon payments as well as discount amortization as the price recovers as the underlying bonds approach maturity.From what I can tell IBDV2030 was issued in June 2020 at 25.
You seem to think you'll receive 5.2% of $23 every year as dividends plus $2.12 in price appreciation. The 5.2% includes the price appreciation, just as it does for any bond bought at a discount.
(I'm skeptical there exists a bond fund that was issued with a yield of 5%, has lost 8% in value, and still yields 5.2%. More likely the fund was issued with a lower yield, and now the price and yield have moved in opposite directions, as expected.)
It has an avg yield to maturity of 4.78 as of yesterday and was over 5 a few days ago. Price is up quite a bit today.
The weighted average coupon is 3.45.
I am misunderstanding the actual interest I will receive until maturity I guess.
Just to clear up my brain fog here.
So if I purchased this when the current YTM was 5, I should receive what as it climbs back up to 25 or so at maturity? This is what confuses me.
I will make a profit on the nav but does the interest become less and less so in the end I am getting about 5% when you add the interest and nav appreciation?
Statistics: Posted by hoops777 — Fri Aug 02, 2024 3:47 pm — Replies 51 — Views 5674