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basic question regarding bond fund
Old 11-05-2010, 11:16 AM   #1
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basic question regarding bond fund

looking to put some excess cash into vanguard short term bond index fund

avg annual RoR for 1 yr = 4.87%. I found the yield = 2.24% on yahoo finance. Does that mean the rest of 2.63% came from cap gain? Does that mean I have to sell the fund to get the 4.xx RoR(assuming future=past performance for simplicity sake) or simply by holding the fund for about a year will get me that kind of return? sorry for the dumb question, I'm really new to bond/bond funds.


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Old 11-05-2010, 11:25 AM   #2
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Yes, the rest of the return was from capital gain. It is not realized unless you sell it. That is the gain in NAV historically (for the period). It has no relationship with the rate of return going forward (which is unknowable).

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Old 11-05-2010, 12:07 PM   #3
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I would recommend reading this: Category:Bonds - Bogleheads

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