How do bond funds / ETF’s work?

[ppnewbie]

If I buy a 30 year treasury today at 4.7 percent I will get 4.7 percent yield for 30 years regardless of the tradeable value of the bond.

How does that work if I purchase 100 dollars of the EDV etf which has an average duration of 25 years. Would I get approximately a 4.65 percent yield (their current average) for 25 years?

[boglerdude]

yeah you'll get 4.65 total return back after 25 years

its like holding a bond thats always 25 year duration

Anybody heard from robert kessler? Seems like he'd be buying

https://www.youtube.com/watch?v=y1EKb8dk0vg

[mathjak107]

I think he retired and closed the firm

He did awful

[ppnewbie]

yeah you'll get 4.65 total return back after 25 years

its like holding a bond thats always 25 year duration

Anybody heard from robert kessler? Seems like he'd be buying

https://www.youtube.com/watch?v=y1EKb8dk0vg

Just to clarify. You mean I will get 4.65 yield FOR 25 years not “after” 25 years, correct?

[ppnewbie]

@boglerdude

Also thanks for the EDV reference. I was buying full duration 30 year bonds because I wanted biggest impact in a deflationary environment and TLT (expensive) are an average of 20 year durations.

With EDV being so cheap and a 25 year average duration it may be an easier choice.

[mathjak107]

yeah you'll get 4.65 total return back after 25 years

its like holding a bond thats always 25 year duration

Anybody heard from robert kessler? Seems like he'd be buying

https://www.youtube.com/watch?v=y1EKb8dk0vg

Just to clarify. You mean I will get 4.65 yield FOR 25 years not “after” 25 years, correct?

kessler did pretty poorly..he closed the firm and retired

[whatchamacallit]

I was now curious myself how EDV paid distributions since it has zero coupon bonds. I found these bogleheads threads that have some good responses:

https://www.bogleheads.org/forum/viewtopic.php?t=401634

https://www.bogleheads.org/forum/viewtopic.php?t=346035


I would assume that the distributions would line up with the yield to maturity at the time you buy it. You may get lucky and yields fall and you get your payment early with the price going up instead of slowly with distributions.

I remembered this podcast that may help in regards to bond funds. Check out starting at 20 minutes:

https://moneyfortherestofus.com/418-bon ... sterclass/