How does LEMB's distributions work? [iShares EM Local Currency Bond ETF]

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
cur_inv_1990
Posts: 4
Joined: Mon Aug 07, 2017 8:34 pm

How does LEMB's distributions work? [iShares EM Local Currency Bond ETF]

Post by cur_inv_1990 »

I've been looking at emerging market bond funds to diversify my portfolio and saw LEMB. This looked like an interesting way to hedge against geography and currency. But when I looked on ishares[0], the last time the bond had a distribution was 2019, and the 2020 distribution was $0. How can a bond with 3% of its holdings maturing in less than 1 year, and 12% of its holdings maturing in less than 2 years not pay any dividends in almost 2 years? Even worse, it doesn't look like there were any dividends for 3 years between 2015 and 2018[1].

[0] https://www.ishares.com/us/products/239 ... y-bond-etf
[1] https://www.nasdaq.com/market-activity/ ... nd-history
ctfish
Posts: 78
Joined: Thu Aug 08, 2013 6:52 pm

Re: How does LEMB's distributions work?

Post by ctfish »

All to fees and fund-paid taxes?
User avatar
LadyGeek
Site Admin
Posts: 76418
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: How does LEMB's distributions work? [iShares EM Local Currency Bond ETF]

Post by LadyGeek »

cur_inv_1990 - You had a duplicate post in the Personal Investments forum, which I've removed. There were no replies. I also retitled the thread to help with the ticker symbol.

(Thanks to the member who reported the post and provided a link to the duplicate post.)
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
dziuniek
Posts: 1319
Joined: Mon Jul 23, 2012 2:54 pm
Location: C0rrupticut

Re: How does LEMB's distributions work? [iShares EM Local Currency Bond ETF]

Post by dziuniek »

Per seeking Alpha - this etf does not pay dividends?
Get rich or die tryin'
klaus14
Posts: 774
Joined: Sun Nov 25, 2018 7:43 pm

Re: How does LEMB's distributions work?

Post by klaus14 »

ctfish wrote: Tue Oct 12, 2021 7:40 am All to fees and fund-paid taxes?
i think this is the answer. And maybe if there is any default/capital loss, they deduct it from other received interest ?
My investment algorithm: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=351899&p=6112869#p6112869
Topic Author
cur_inv_1990
Posts: 4
Joined: Mon Aug 07, 2017 8:34 pm

Re: How does LEMB's distributions work? [iShares EM Local Currency Bond ETF]

Post by cur_inv_1990 »

klaus14 wrote: Tue Oct 12, 2021 10:22 am
ctfish wrote: Tue Oct 12, 2021 7:40 am All to fees and fund-paid taxes?
i think this is the answer. And maybe if there is any default/capital loss, they deduct it from other received interest ?
Any way to find out for sure? Is there somewhere I can look at the prospectus to find out? I'm quite new at this so apologies if these questions are naïve.
zkn
Posts: 10
Joined: Thu Oct 14, 2021 12:45 pm

Re: How does LEMB's distributions work? [iShares EM Local Currency Bond ETF]

Post by zkn »

I could not find any documentation describing the process.

But comparing LEMB (iShares JP Morgan EM Local Ccy Bd ETF) to its competitor EMLC (VanEck JPMorgan EMLcl Ccy Bd ETF) shows that they tracked each other closely throughout their shared history since 2012 (correlation = .96; CAGR LEMB = .41%; CAGR EMLC = .19%). This is despite EMLC having distributions every year while LEMB having little to no distributions 2015-2017 and 2020-2021. So this is re-assuring that the lack of distributions is not reflecting lost value but instead that the value is being kept in the fund.

So, I would surmise that the reduced distributions of LEMB is reflecting better tax management to avoid distributions (compared to EMLC) when possible during periods of negative or zero total return.

https://www.portfoliovisualizer.com/bac ... ion2_2=100
Post Reply