Bustoff wrote:If interest rates account for the Income Return, then what explains or accounts for the Capital Return portion of a bond fund?
For 2011, the Vanguard Total Bond Market Index Fund (AdmShrs), had a Capital Return of 4.26%.
For 2012 its Capital Return was 1.42%.
2. If interest rates account for the Income Return, then what explains or accounts for the Capital Return portion of a bond fund ?
ObliviousInvestor wrote:I could be missing something, but I'm not sure that it makes sense to talk about a bond fund selling at a discount or premium. At any given time, some of the bonds in the portfolio will have market values less than their face values, while other bonds will have market values greater than their face values.
Bustoff wrote:When I see that the Total Bond Fund has an average coupon of 3.7%, I don't understand why its SEC yield is only 1.61%. Why is its SEC yield so much lower?
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