Trading the stockmarket (NO Referrals)

But the most ****** up thing is that the whole C suite sold their shares the day before the collapse for millions and the VCs caught wind that SVB were raising to try and cover liquidity and rugged all their companies money quicksharp so they didn't lose out, thus taking billions, something like 46bil in a day! A nice day for c suite and VCs ******* on everyone again as per. But to be fair if they hadn't made such stupid investments in the first place...
 
I've been looking at bond ETFs and it seems to me they are too high, the yield is too low.

Does not make any sense, for example vanguard is give or take 2% yield on their bond ETF's

Real yield needs to be around 4-5%.

What magic is keeping the prices so high?
 
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I'm currently seeing rumours flying around that Harry and Megan had all their cash deposited with SVB and Harry has lost the lot..... :D
 
platinum87 said:
I've been looking at bond ETFs and it seems to me they are too high, the yield is too low.

Does not make any sense, for example vanguard is give or take 2% yield on their bond ETF's

Real yield needs to be around 4-5%.

What magic is keeping the prices so high?
Click to expand...
I’m no bond ETF expert but doesn’t this mean that the market expects some level of capital appreciation on top of the yield which will then result in a total return more in line with your expectation? The ETF might hold some old bonds which have traded down due to rising rates and there will now be a pull to par effect as we get nearer to the bond’s maturity.

For example, if 2 years ago the ETF bought a bond with 7 years left to maturity, with a coupon of 1.8% and today rates are up to 4% so the bond has traded down to 90 (with 5 years remaining to maturity). Then your yield is 1.8%/0.9 = 2%. But your total expected return is more like 4% due to a pull to par impact of about an additional 2% pa.

I might be wrong as I don’t really know how ETFs work!
 
Psiko said:
I’m no bond ETF expert but doesn’t this mean that the market expects some level of capital appreciation on top of the yield which will then result in a total return more in line with your expectation? The ETF might hold some old bonds which have traded down due to rising rates and there will now be a pull to par effect as we get nearer to the bond’s maturity.

For example, if 2 years ago the ETF bought a bond with 7 years left to maturity, with a coupon of 1.8% and today rates are up to 4% so the bond has traded down to 90 (with 5 years remaining to maturity). Then your yield is 1.8%/0.9 = 2%. But your total expected return is more like 4% due to a pull to par impact of about an additional 2% pa.

I might be wrong as I don’t really know how ETFs work!
Click to expand...

Yes you are correct, thanks.
 
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