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Post by mozart522 on Apr 2, 2022 2:06:43 GMT
So I understand these can be used like a bond ladder, but how can you tell if the investment price you pay will be returned at the maturity date? For example, the 2022 version (BSCM) has an NAV of 21.26. If I buy 10k worth, I know I'll get the par price for those shares of all the bonds in the fund in december, but how do I know if that is even close to my 10k? With a bond, I pay 1000 and get 1000 back plus interest if held to maturity. But how can I tell if the purchase NAV of these is close to the payback?
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Post by Capital on Apr 2, 2022 11:13:51 GMT
mozart522 , I have never been able to find this for Bullet Shares; however, for iShares iBonds you can download a spreadsheet of all the EFTs holdings. The spread sheet has columns for "Market Value" and "Par Value" of the EFT holdings. You can sum those two columns to see if you are paying a premium or discount to Par. As I said I have never been able to find that same information for Bullet Shares. It would be interesting to see that for Bullet Shares as well. edit to add - I just pulled down the spreadsheet for IBTI (iShares Dec 2028 Maturity Treasury ETF) - Market Value of that portfolio was $17,790,778.89 as of this posting and Par Value was $18,443,804.00.
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Post by Chahta on Apr 2, 2022 12:15:15 GMT
Does this help? It is a fund...nothing is guaranteed. |
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Post by mozart522 on Apr 2, 2022 12:21:23 GMT
mozart522 , I have never been able to find this for Bullet Shares; however, for iShares iBonds you can download a spreadsheet of all the EFTs holdings. The spread sheet has columns for "Market Value" and "Par Value" of the EFT holdings. You can sum those two columns to see if you are paying a premium or discount to Par. As I said I have never been able to find that same information for Bullet Shares. It would be interesting to see that for Bullet Shares as well. edit to add - I just pulled down the spreadsheet for IBTI (iShares Dec 2028 Maturity Treasury ETF) - Market Value of that portfolio was $17,790,778.89 as of this posting and Par Value was $18,443,804.00. So if I understand this, if you bought that now, you would get more back at Par than you put in, but your yield might be less than if the fund was at par or at premium? |
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Post by mozart522 on Apr 2, 2022 12:24:04 GMT
Not really. I read that before. How does it tell me if the current price is above or below par for the fund? |
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Post by Capital on Apr 2, 2022 13:54:57 GMT
mozart522 , I have never been able to find this for Bullet Shares; however, for iShares iBonds you can download a spreadsheet of all the EFTs holdings. The spread sheet has columns for "Market Value" and "Par Value" of the EFT holdings. You can sum those two columns to see if you are paying a premium or discount to Par. As I said I have never been able to find that same information for Bullet Shares. It would be interesting to see that for Bullet Shares as well. edit to add - I just pulled down the spreadsheet for IBTI (iShares Dec 2028 Maturity Treasury ETF) - Market Value of that portfolio was $17,790,778.89 as of this posting and Par Value was $18,443,804.00. So if I understand this, if you bought that now, you would get more back at Par than you put in, but your yield might be less than if the fund was at par or at premium? , This is the best information that is available. The yield is what the current yield happens to be. In this case the yield to maturity is 2.57% per iShares. The Weighted average coupon is listed as 1.80%. That in and of itself tells me that I am buying at a discount to par. The spreadsheet that you download has all the positions held. Among that information is weighted average of the total portfolio, current market price of the issue, duration, coupon, yield to worst, maturity, etc. From the web page below go to the "holdings" section on the page then clock on the link to the excel spreadsheet titled "Detailed Holdings and Analytics" to open the spreadsheet I am describing. You can find this same information of all of iShares iBond EFTs, Treasury, Corporate and High Yield series. =https://www.ishares.com/us/products/312463/ishares-ibonds-dec-2028-term-treasury-etf |
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Post by fishingrod on Apr 2, 2022 13:57:25 GMT
mozart522 , I have not used them. But the Avg. Weighted Price on BSCM as of 3/31/2022 was 100.45, so a little premium to pay. The Yield to Worst Call 1.70%.
So one pays a little more than par, but gets back par at 'maturity redemption', while the worst yield that could happen with early calls and redemption is 1.70%.
I don't want to be a guinea pig.
"So if I understand this, if you bought that now, you would get more back at Par than you put in, but your yield might be less than if the fund was at par or at premium?"
Bonds bought over par will have a lower yield than the stated coupon, because one is paying a premium, more than even or par for the coupon. But only receiving back par at maturity or call.
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Post by Capital on Apr 2, 2022 15:03:52 GMT
mozart522 , I have not used them. But the Avg. Weighted Price on BSCM as of 3/31/2022 was 100.45, so a little premium to pay. The Yield to Worst Call 1.70%.
So one pays a little more than par, but gets back par at 'maturity redemption', while the worst yield that could happen with early calls and redemption is 1.70%.
I don't want to be a guinea pig.
, where do you find the weighted price information? TIA |
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Post by fishingrod on Apr 2, 2022 15:13:13 GMT
Down the page and to the right.
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Post by mozart522 on Apr 2, 2022 15:29:54 GMT
So if I understand this, if you bought that now, you would get more back at Par than you put in, but your yield might be less than if the fund was at par or at premium? , This is the best information that is available. The yield is what the current yield happens to be. In this case the yield to maturity is 2.57% per iShares. The Weighted average coupon is listed as 1.80%. That in and of itself tells me that I am buying at a discount to par. The spreadsheet that you download has all the positions held. Among that information is weighted average of the total portfolio, current market price of the issue, duration, coupon, yield to worst, maturity, etc. From the web page below go to the "holdings" section on the page then clock on the link to the excel spreadsheet titled "Detailed Holdings and Analytics" to open the spreadsheet I am describing. You can find this same information of all of iShares iBond EFTs, Treasury, Corporate and High Yield series. =https://www.ishares.com/us/products/312463/ishares-ibonds-dec-2028-term-treasury-etf Thanks. I found it for corporate which was my interest. |
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Post by mozart522 on Apr 2, 2022 15:46:17 GMT
Down the page and to the right.
Thanks. So 1.89 is the yield to maturity as of today for example, but it may be different several months from now. With the 2022 issue, any maturing bonds after june 30 are basically held in cash, so you would not likely get the 1.89% yield, or is that already baked in to YTM number? |
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Post by fishingrod on Apr 2, 2022 15:49:32 GMT
Down the page and to the right.
Thanks. So 1.89 is the yield to maturity as of today for example, but it may be different several months from now. With the 2022 issue, any maturing bonds after june 30 are basically held in cash, so you would not likely get the 1.89% yield, or is that already baked in to YTM number? It is baked in to the YTM. But pay more attn. to YTWC yield to worst call. Just in case, it is the worst case scenario, barring defaults.
"Yield to maturity will be equal to coupon rate if an investor purchases the bond at par value (the original price). If you plan on buying a new-issue bond and holding it to maturity, you only need to pay attention to the coupon rate.
If you bought a bond at a discount, however, the yield to maturity will be higher than the coupon rate. Conversely, if you buy a bond at a premium, the yield to maturity will be lower than the coupon rate."
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Post by fishingrod on Apr 2, 2022 15:58:06 GMT
I really wish yogibearbull would comment or someone more competent than me. I am not an expert. Especially with something like this product. |
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Post by mozart522 on Apr 2, 2022 16:22:53 GMT
Thanks. So 1.89 is the yield to maturity as of today for example, but it may be different several months from now. With the 2022 issue, any maturing bonds after june 30 are basically held in cash, so you would not likely get the 1.89% yield, or is that already baked in to YTM number? It is baked in to the YTM. But pay more attn. to YTWC yield to worst call. Just in case, it is the worst case scenario, barring defaults.
"Yield to maturity will be equal to coupon rate if an investor purchases the bond at par value (the original price). If you plan on buying a new-issue bond and holding it to maturity, you only need to pay attention to the coupon rate.
If you bought a bond at a discount, however, the yield to maturity will be higher than the coupon rate. Conversely, if you buy a bond at a premium, the yield to maturity will be lower than the coupon rate."
Thanks. |
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Post by Chahta on Apr 2, 2022 23:13:48 GMT
Not really. I read that before. How does it tell me if the current price is above or below par for the fund? Use M* quote page then go to portfolio tab. The weighted price is displayed.and indicates +/- to par. |
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Post by mozart522 on Apr 3, 2022 0:32:28 GMT
Not really. I read that before. How does it tell me if the current price is above or below par for the fund? Use M* quote page then go to portfolio tab. The weighted price is displayed.and indicates +/- to par. Thanks, Mister Fantastic  |
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Post by yogibearbull on Apr 3, 2022 1:00:53 GMT
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Post by fishingrod on Apr 3, 2022 11:35:03 GMT
"The funds do not seek a predetermined amount at maturity, and the amount an investor receives may be worth more or less than the original investment. In contrast, when an individual bond matures, an investor typically receives the bonds par (or face value)." www.invesco.com/us/en/insights/bulletshares-faq.html |
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Post by fishingrod on Apr 3, 2022 11:43:06 GMT
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Post by anitya on Apr 3, 2022 23:17:25 GMT
I checked out IBTE, ishares Treasury ETF maturing in December 15, 2024 - 2.7+ yrs out. 50% of the bonds (by MV) mature in September 2024 and another 35% of the bonds mature between January and April 2024. But an investor will not get their money from the fund until December 15, 2024. So, there can be a material difference in the YTM of the underlying bonds versus the (undetermined) YTM of the fund itself.
The YTM of the underlying bonds as of March 28, 2022 was 2.46% (fund website not updated for later dates). Three Yr Treasury note yields were 2.53% on March 28 and closed at 2.63% on April 1. Two yr Treasuries were at 2.35% and closed at 2.46% on April 1. The market price of IBTE was $24.58 (3/28) and $24.56, at a slight premium (0.13%) to NAV, on 4/1.
The trading volume (21K on 4/1) of the fund is quite low.
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Post by Chahta on May 11, 2022 15:31:26 GMT
I have a small amount of brokerage cash sitting so I decided to buy a Bullet Share ETF (BSJM) today. I selected HY that ends this December. It is priced below par at $99.34 per the Invesco website. I would hope to collect around 4% annual and get my principal back later this year. Hopefully no defaults.
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Post by fishingrod on May 11, 2022 16:18:29 GMT
I have a small amount of brokerage cash sitting so I decided to buy a Bullet Share ETF (BSJM) today. I selected HY that ends this December. It is priced below par at $99.34 per the Invesco website. I would hope to collect around 4% annual and get my principal back later this year. Hopefully no defaults. Please let us know how the redemption process goes, and the NAV and price at the end. |
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Post by fishingrod on May 11, 2022 16:35:40 GMT
I notice that maturing bonds will be reinvested into 3 month T Bills which are yielding .917% right now.
Also this caught my eye.
"During the final year of the Fund's operations, as the bonds mature and the portfolio transitions to cash and cash equivalents, the Fund's yield will generally tend to move toward the yield of cash and cash equivalents and thus may be lower than the yields of the bonds previously held by the Fund and/or bonds in the market."
"Unlike a direct investment in bonds, the Fund's income distributions will vary over time and the breakdown of returns between Fund distributions and liquidation proceeds are not predictable at the time of investment. For example, at times the Fund may make distributions at a greater (or lesser) rate than the coupon payments received, which will result in the Fund returning a lesser (or greater) amount on liquidation than would otherwise be the case. The rate of Fund distribution payments may affect the tax characterization of returns, and the amount received as liquidation proceeds upon Fund termination may result in a gain or loss for tax purposes."
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Post by Chahta on May 11, 2022 16:58:09 GMT
I did not see that fine print but it’s OK with me. SEC yield is over 4% currently. The fund ends only approximately in December.
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Post by Deleted on May 11, 2022 17:04:08 GMT
I did not see that fine print but it’s OK with me. Why didn't you just buy 3 month T-bills yourself and forgo the middleman expense of a fund? |
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Post by Capital on May 11, 2022 17:25:33 GMT
The problem I see with these "Term" Bond Funds is that near the end they are mostly cash as the portfolio matures. Yields in those time move toward Money Market Yields. I am more inclined to buy bonds and Treasuries. The more I see of these EFTs the more that it appears that they will not suit my needs.
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Post by Chahta on May 11, 2022 18:11:16 GMT
I do own some T bills. I am not specifically buying them with this fund. If bonds mature 1 or 2 months before the closing date then they would buy T bills. I am curious how it will work. At some point a 2 year ladder might work in lieu of say a HY, MS or other type of OE mutual fund. Since they are an ETF buying and selling shouldn’t be a problem. A “set it and forget it” approach could work. I have a limit order in for 34 shares. Big deal.
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Post by Chahta on Dec 6, 2022 15:56:28 GMT
So this is the big month for my experiment. The fund delists (12/15) next week and will distribute (12/19) the following week. BSJM is all in Treasuries and MM currently. I expect to get the NAV at $22.09 which will give me a loss of $0.03/share after reinvesting. If rates move down the next few days the Treasuries could get a bump and I may see the -$0.03 go away. They mature 12/15.
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Post by yogibearbull on Dec 11, 2022 0:17:03 GMT
I have a small amount of brokerage cash sitting so I decided to buy a Bullet Share ETF (BSJM) today. I selected HY that ends this December. It is priced below par at $99.34 per the Invesco website. I would hope to collect around 4% annual and get my principal back later this year. Hopefully no defaults. You did collect distributions since your 5/11/22 purchase of BSJM, but the NAV declined -1.56% as of 12/9/22, and reinvested TR (adjusted-prices at Stockcharts) was -0.29% (call it flat?). In the chart link, enter the start date as 5/12/22 (it may be defaulting to 1 yr). LINK BSJM _BSJM. If I remember, I will try to post TR since inception after the closing date 12/15/22 for BSCM (inception 7/17/13) and BSJM (inception 9/17/14). |
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Post by Chahta on Dec 11, 2022 14:30:30 GMT
I notice that maturing bonds will be reinvested into 3 month T Bills which are yielding .917% right now.Also this caught my eye. "During the final year of the Fund's operations, as the bonds mature and the portfolio transitions to cash and cash equivalents, the Fund's yield will generally tend to move toward the yield of cash and cash equivalents and thus may be lower than the yields of the bonds previously held by the Fund and/or bonds in the market." "Unlike a direct investment in bonds, the Fund's income distributions will vary over time and the breakdown of returns between Fund distributions and liquidation proceeds are not predictable at the time of investment. For example, at times the Fund may make distributions at a greater (or lesser) rate than the coupon payments received, which will result in the Fund returning a lesser (or greater) amount on liquidation than would otherwise be the case. The rate of Fund distribution payments may affect the tax characterization of returns, and the amount received as liquidation proceeds upon Fund termination may result in a gain or loss for tax purposes." Funny....how 7 months changes things; 0.917 to 4% today. |
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