Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Total return from a bond fund.
Old 07-01-2008, 03:17 PM   #1
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,268
Total return from a bond fund.

How do you figure the total return of a bond fund? If you buy the fund at a NAV of 10 and at the end of the year the NAV is 10.50, can you just add that 5% return to whatever the yield is? So if the fund says it has a 5% yield, did you get a 10% return for the year?
__________________

__________________
utrecht is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-01-2008, 03:22 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
The total return depends on what you assume about the coupon and when you got it. So if you bought at 10 and got 50 cents in interest on March 31 and reinvested it in the fund, you have one total return #. If you bought at 10, got 50 cents on 12/31 and left the coupon in a money market fund, you got a different total return.
__________________

__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 07-01-2008, 03:55 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,268
I dont underdstand bond funds at all so I dont know what a "coupon" is. Can you put it into laymans terms for me?

I recently added Pimco Total Return fund to my portfolio and I want to know what my return is at any given time. It has a current yeild of 5.11% and a NAV of 10.63

If I invested $100,000, will I be getting $5110 in interest in a one year period? (Interest will be reinvested in the fund inside my 401k). Can I add that to whatever the increase in NAV is at the end of one year? Or am I looking at this all wrong?
__________________
utrecht is offline   Reply With Quote
Old 07-01-2008, 04:31 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Coupon is the interest the bonds in the funds throw off.

Assuming that yield doesn't change over the course of the year (it will), yes, you would get about $5110 interest that will be reinvested. You can ad it to NAV. Simple way to see total return: at the end of the year, what you have minus what you paid divided by what you paid is your return.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 07-01-2008, 06:10 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 5,672
This may give you all you want. It's the M* total return numbers. You will have to put in the ticker for the Pimco Total Return you purchased since there are many flavors of this, I chose PTTAX here:
PIMCO Total Return A Report (PTTAX) | Total Returns

Or if you really want to do the calculation go to Yahoo historical prices:
PTTAX: Historical Prices for PIMCO FUNDS TOTAL RETURN FUND C - Yahoo! Finance
Use the adjusted prices to the right which are adjusted for distributions (dividends).
__________________
Lsbcal is offline   Reply With Quote
Old 07-01-2008, 06:51 PM   #6
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by utrecht View Post
How do you figure the total return of a bond fund? If you buy the fund at a NAV of 10 and at the end of the year the NAV is 10.50, can you just add that 5% return to whatever the yield is? So if the fund says it has a 5% yield, did you get a 10% return for the year?
This oversimplifies the underlying math, but adding the percentage gain in NAV plus the percentage in interest earned in the year is a pretty decent estimate.

As mentioned already, just see what happens to your position over the course of a year (very easy if you don't buy or sell shares in the period). If you started the year with $10,000 in a bond fund and you ended it with $10,632, your total return was 6.32% annualized.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is online now   Reply With Quote
Old 07-02-2008, 08:49 AM   #7
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,268
Is there any place on the Morningstar site that shows when these bond funds actually pay out the interest? Are they all monthly, quarterly? All different?
__________________
utrecht is offline   Reply With Quote
Old 07-02-2008, 08:55 AM   #8
Full time employment: Posting here.
CitricAcid's Avatar
 
Join Date: May 2008
Posts: 546
Not sure about Morningstar, but I am sure you can look up the bond fund on google finance, yahoo finance, marketwatch or whatever else you use, bring up a chart and click dividends and it will tell you the amount and when they were paid.
__________________
CitricAcid is offline   Reply With Quote
Old 07-03-2008, 06:23 AM   #9
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,268
I realize that I can easily figure my total return at the end of the year by using my starting and ending numbers, but how is the total return figured at any given point in time when the interest is only paid monthly or quarterly.

I can look at Morningstar or any number of other finance sites right now and see what the total return for any bond fund is YTD. I guess my question is how do they calculate that number in the middle of the period. I need to know that so I can set up my spreadsheet to calculate my returns and any point that I want to check it just like I can do with stock funds or individual stocks.
__________________
utrecht is offline   Reply With Quote
Old 07-03-2008, 07:34 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,925
Seems like the calculation would be the same as what you are doing for stock funds since, in general, they would be be paying distributions during the year, tho perhaps less frequently than a bond fund. For the YTD return, can't you take the NAV and # shares (which keep changing as you reinvest during the year) to get your total value at any point in time. Then treat as you did at year end......subtract starting value to get increase(decrease) and divide by starting value to get YTD return (this is not annualized). This would be a bit of pain keeping up w/ the changing number of shares.
__________________
kaneohe is offline   Reply With Quote
Old 07-03-2008, 07:39 AM   #11
Full time employment: Posting here.
CitricAcid's Avatar
 
Join Date: May 2008
Posts: 546
If you are talking about a bond fund, I would treat it just like any other fund, comparing the price now to the price when you bought it (or at the beginning of the year or whenever) and dividing by the original price. Also add in dividends in your return and you got your total return.
__________________

__________________
CitricAcid is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Prime Money Market Fund vs. Total Bond Fund two4theroad FIRE and Money 2 04-10-2008 01:46 PM
Total Bond Mkt Index vs PIMCO Total Return Inst/Stable Value Dude FIRE and Money 7 04-03-2008 01:11 AM
Pimco Total Return Fund chinaco FIRE and Money 2 02-26-2007 02:38 AM
Quicken - Total Return trixs FIRE and Money 2 02-14-2007 12:21 PM
Nuveen Tax Advantaged Total Return JTA Tony Tampa FIRE and Money 0 04-11-2006 04:42 PM

 

 
All times are GMT -6. The time now is 05:38 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.