Let’s take VGIT for example. Its most recent “dividend” was 14.96 cents per share, which is about a 3.09% yield. Yet the 30-day yield is 4.29%. Even a couple of months ago, the 30-day yield was over 4.5% but the actual yield was only like 3.2%.
Is this because the fund holds older, lower coupon bonds from when the 10-year was lower? And if so, will the actual yield go up when the 10-year goes down due to the older, lower coupon bonds reaching maturity and being replaced by newer, higher coupon bonds?
Just trying to understand how the product works exactly.
Submitted March 17, 2024 at 11:25PM by Fun_Tackle9752 https://ift.tt/AF0tEXn
