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-   -   Watch out when comparing yields on junk bond funds (https://www.early-retirement.org/forums/f28/watch-out-when-comparing-yields-on-junk-bond-funds-47551.html)

mathjak107 12-02-2009 03:09 PM

Watch out when comparing yields on junk bond funds
 
i never realized it but the sec rules for bond funds has them figuring their 7 day yields based on par values and yield to maturity...

high yield bonds are almost always bought now below par so the yield for the funds include both the dividend and the price difference between par and what will actually be paid at maturity.

bond funds never hold these bonds until maturity so the yields are overstated by quite a bit.


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