In this series of articles, we cover some unexplored aspects of bond investing. Our idea is to bring to your attention a number of facts which, in our view, do not get the deserved amount of attention or coverage. Our approach is totally forward-looking. We are confident that, once you have peeled the orange, you will start looking at bonds and bond funds in a different way.
The topics that this series will cover include:
1. Bond funds' risk:Why the risk of investing in bonds can be very high if misunderstood and how it is fundamentally different from the risk of investing in equities;
2. Distributions: how bond funds' distributions can significantly overstate the actual return of funds and what are the tax implications of this distortion;
3. Management Report of Fund Performance: what this report tells you about your fund's returns and distributions and where you can find it;
4. Yield-to-maturity (YTM): what it is and how it is the most important component of a bond fund's future returns;
The intial four publications under this series cover the above topics. We will update this section as and when we release future publications.