boggler wrote: fishnskiguy wrote: boggler wrote:
FinancialDave wrote:Bonds funds pay out the interest into your account on a fixed date basis -- but it is based on how many days you owned the fund during the month.
It is my understanding that bond funds accrue interest daily, but pay it monthly (usually). Is this not true?
Yes. If you buy a bond fund one day before the end of the month, you will get one day's interest on the first.
Do they start counting from the trade date?
From empirical data it is hard to say whether the interest starts accruing from the trade date or the settlement date since in my account the settlement date is the very next day. If you think what happens in your bank account, interest usually starts accruing from the date of deposit and not necessarily the settlement date. Clearly, I am not the expert on this topic, as I don't normally do bonds, which are only basically paying out pocket change right now.
I love simulated data. It turns the impossible into the possible!