Talk:Zero-coupon bond

From Bogleheads

Dan: Zero coupon bonds must be bought on the secondary market, with bid-ask spreads. They are not sold direct from the treasury. One must first ascertain these spread and aquisition costs {I do not have this data) before determining if the 0.57% annual expense ration of the American Century funds is a major disadvantage. Blbarnitz 02:57, 1 April 2009 (UTC)

from forbes article:

In December Vanguard introduced an Extended Duration Treasury fund, which owns zero coupon Treasurys with maturities of at least 20 years. The minimum investment is $5 million for the mutual fund. You can get a round lot of the ETF mirror fund for $9,930. You can also, of course, buy zeros directly. But they are expensive to trade. The retail bid/ask spread for 20 Treasury Strips due in 2028--that's $20,000 face amount, now worth $10,100--is in the neighborhood of 4.2%. The bid/ask spread for 100 shares of the new Extended Duration ETF is currently only 1.5% (on very low volume). Blbarnitz 03:15, 1 April 2009 (UTC)