I don't understand how bond etfs work. Is there a limited number of shares that determine the price? Or is the price completely reflective of the intrest rates. Also why do some bond etfs have different monthly/quarterly payouts? I would have thought the yield would stay the same unless underlying bonds defaulted and instead the price would change to reflect changing intrest rates. Is there a set game plan for how etfs handle a change in intrest rates? Ie do they sell bonds and buy the new interest rate, or do they hold on to the bonds regardless? And could explain the bonds duration with respect to being in an etf? Will a 10 year bond etf sell the bonds when they have say a 1 year duration remaining, hold until completion or keep buying and selling so all bonds have ~10 years.
Submitted May 19, 2017 at 11:45PM by ColdHearted_Catfish http://ift.tt/2rBMQvk
