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Discussion Starter #1
I am unsure how the yields are calculated on these shares. There seems to be a conflict between the way Morningstar and the TSX posting arrives at it. For example today TSX posts a yield of 2.925 for XSB while Morningstar shows a yield of 3.97. Anyone have an explanation ? Thanks .
 

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I am unsure how the yields are calculated on these shares. There seems to be a conflict between the way Morningstar and the TSX posting arrives at it. For example today TSX posts a yield of 2.925 for XSB while Morningstar shows a yield of 3.97. Anyone have an explanation ? Thanks .
Yes, when looking at bond funds look at yield-to-maturity, not the cash yield. The current yield for the DEX Short Term Bond Index is roughly 2.2%.

http://www.canadianbondindices.com/

XSB's yield should be roughly 1.95% after accounting for the MER.
 

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Thanks CC. Makes one wonder why you wouldn't just buy a GIC when you look at the arithmetic for these funds. What do you think ?
 

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Thanks to all . I shares Canada tell me they calculate yield by totaling the individual distributions over 12 months and dividing by the NAV at the end of the quarter. I am still waiting to hear how Morningstar and TSX do it .
 

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CC: I wonder how you came up with your figures for the XSB true yield. Currently Ishares show a one year yield of 3.69 % and a MER of 0.25 %. However TSX show 2.925 and Morningstar 3.97. I am going to call ishares and see if they can clear it up. Thanks again.
 

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Just to clarify: ishares tell me that the true yield for XBB is 4.14% and XSB is 3.69% (currently) with the MER already deducted from the calculation. The MER for XSB is 0.275 and for XBB 0.33 %. These values are calculated as previously described. Thanks. Good luck to all.
 

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Just to clarify: ishares tell me that the true yield for XBB is 4.14% and XSB is 3.69% (currently) with the MER already deducted from the calculation. The MER for XSB is 0.275 and for XBB 0.33 %. These values are calculated as previously described. Thanks. Good luck to all.
I don't know what iShares means by "true yield". The current cash yield on a bond ETF is not very meaningful. The current coupon yield is also not very meaningful either. You need to look at Yield to maturity (used to be available on the old iShares website but the new one says NA).

You can find the index data on the CanadianBondIndices.com website. Here is the yield chart for XSB:



The yield on the DEX Short Term Bond Index is 2.2%. Deduct 0.25% for expenses and you can expect XSB to yield about 1.95%.
 

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CC: I believe two different calculations are involved here. The PC Bond Index figure applies to all the issues in that category thus their current value for DEX of 2.155%. XSB on the other hand calculates the yield based on a smaller sampling of bonds that are in that fund. According to iShares they calculate yield over a one year period for example by taking the total distributions for the year and dividing by the final quarter NAV. These figures are after the MER deduction. At least this is my understanding. I found there is a tension between firms like PC Bond, Morningstar, IShares etc . and they are unwilling to comment on the way someone else calculates yield. Why am I not surprised . Thanks and GLTA.
 
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