On Bigcharts.com I believe Tuesday's posted yield for TLT was 3.12%. For the last 2 days I see 2.61%.
Which is correct? With a price decrease, the yield should have climbed.
Dopes anyone have an explanation?
Thanks.
Posted TLT Yield
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bedraggled
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Re: Posted TLT Yield
Hey bedraggled,
Go here:
https://www.ishares.com/us/products/239 ... y-bond-etf
You'll see Distribution Yield, 30 Day SEC Yield, Average Yield, and 12m Trailing Yield. You can click on the little information icon next to each one for further clarification (or, in my case, to add to the confusion!).
For TLT it's the expense ratio of .15% that I don't like which is why I try to just buy bonds from Fidelity whenever possible (can't do it with small amounts of $). If bond yields were to stay more or less flat and TLT returns, say 3%, that expense ratio cuts your profit by 5% (from 3.00% to 2.85%). I think Sophie's solution is to hold funds in TLT until she accumulates enough to buy proper bonds.
I do like that interest gets reinvested with TLT. With my lots of LTTs at Fido, the interest just gets thrown off into my core cash holdings. It's not really a big issue but the result is that, over time, the overall profit/loss that is shown for my bonds when I log into Fidelity is lower than it would be if that interest were reinvested. To illustrate, I bought a bunch of 30-year bonds in early 2014 that mature in November of 2043. When I log into Fidelity that position shows a 14.96% return. Because the interest is not being reinvested, I make a rough mental calculation that those bonds have really returned something like 24% over the last three years.
But the big picture is that I have long bonds so that that portion of my holdings can do well when rates are falling.
A bit of a long-ass tangent for this early in the day!
Go here:
https://www.ishares.com/us/products/239 ... y-bond-etf
You'll see Distribution Yield, 30 Day SEC Yield, Average Yield, and 12m Trailing Yield. You can click on the little information icon next to each one for further clarification (or, in my case, to add to the confusion!).
For TLT it's the expense ratio of .15% that I don't like which is why I try to just buy bonds from Fidelity whenever possible (can't do it with small amounts of $). If bond yields were to stay more or less flat and TLT returns, say 3%, that expense ratio cuts your profit by 5% (from 3.00% to 2.85%). I think Sophie's solution is to hold funds in TLT until she accumulates enough to buy proper bonds.
I do like that interest gets reinvested with TLT. With my lots of LTTs at Fido, the interest just gets thrown off into my core cash holdings. It's not really a big issue but the result is that, over time, the overall profit/loss that is shown for my bonds when I log into Fidelity is lower than it would be if that interest were reinvested. To illustrate, I bought a bunch of 30-year bonds in early 2014 that mature in November of 2043. When I log into Fidelity that position shows a 14.96% return. Because the interest is not being reinvested, I make a rough mental calculation that those bonds have really returned something like 24% over the last three years.
But the big picture is that I have long bonds so that that portion of my holdings can do well when rates are falling.
A bit of a long-ass tangent for this early in the day!