Bond Funds
- Thread starter smooch
- Start date
Gone4Good
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Sep 9, 2005
- Messages
- 5,381
Return includes short-term gains and losses.
Yield expresses a bond's "return" if held to maturity.
Example: If you buy a bond on Jan 1 yielding 5% and interest rates go down by year end, your 1 year return (coupon plus capital gain) will be greater than 5%. But if you hold that bond to maturity your return for all periods will be 5%, equal to its original yield.
Yield expresses a bond's "return" if held to maturity.
Example: If you buy a bond on Jan 1 yielding 5% and interest rates go down by year end, your 1 year return (coupon plus capital gain) will be greater than 5%. But if you hold that bond to maturity your return for all periods will be 5%, equal to its original yield.
