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Learning, Sharing, and Teaching => Investor Alley => Topic started by: DaKini on January 16, 2014, 01:34:07 PM

Title: Bonds and bond funds
Post by: DaKini on January 16, 2014, 01:34:07 PM

Hello,
for some time now i wonder if individual bonds and bond index funds prices behave differently.
However i was not able to find information on this, only for the behavior of individual bonds...

Title: Re: Bonds and bond funds
Post by: KingCoin on January 16, 2014, 02:17:33 PM

Quote from: DaKini on January 16, 2014, 01:34:07 PM

for some time now i wonder if individual bonds and bond index funds prices behave differently.

Yes, in the same way that individual stocks and stock indices behave differently.

As a practical matter, individual bonds are more heavily correlated than individual stocks, since all bond prices are heavily influenced by interest rates.

Title: Re: Bonds and bond funds
Post by: CanuckExpat on January 16, 2014, 05:24:45 PM

http://www.bogleheads.org/wiki/Individual_bonds_vs_a_bond_fund

Title: Re: Bonds and bond funds
Post by: DaKini on January 16, 2014, 10:47:05 PM

Great, thank you both!
This helps me alot!