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Defined Maturity Muni Bond ETF Question
Old 05-07-2014, 08:17 PM   #1
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Defined Maturity Muni Bond ETF Question

I'm trying to compare Fidelity vs ishares and am confused about the various yield terminology and the results of Fidelity vs ishares. Fidelity uses the
term "30 day yld". ishares uses the term "30 day SEC yld" and also
"yield to maturity" and "net acquisition yield".

According to this Bond Funds and SEC Yields -

The Fidelity "30 day yld" and the ishares "30 day SEC yield" use the same definition and can be compared. Footnote 5 on the Fidelity page seems to agree

The confusing thing to me is that if I use that metric , the ishares for a given maturity year always are about 0.3% lower in yield even tho the ER for Fidelity is slightly higher. Does that make sense?
2019 (1.34% vs 1.04%); 2017 (0.72% vs 0.46%)
iShares 2019 AMT-Free Muni Term ETF | MUAH Supposedly the SEC yld accounts for the ER and any discounts/premiums when the bonds mature so is the SEC yld the appropriate metric if you hold to maturity?

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Old 05-07-2014, 08:55 PM   #2
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I'm not sure of the Fidelity products but the iShare webpage has a calculator that shows your yield if held to maturity based on a price you input.

Generally, it is yield to maturity +/- and adjustment for a premium or discount absed on the difference between the share price and the NAV - expenses.

My guess is that the difference in yields is due to differences in average credit quality between the two portfolios.

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Old 05-07-2014, 10:27 PM   #3
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Thanks, might be right there. The links in the OP have links to the credit quality distributions for the 2019 ETFs and it does seem to support that. I remember you pointing out the calculator in a previous thread that I was unable to find today but I did see the calculator before I made the post and was kind of hoping you'd reply. I think you mentioned that you had bought some ishares? Were they munis and are you still happy w/ the buy if you did?
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