Quote Originally Posted by Nor View Post
It is unknown if they are 'marking to market' or still valuing them at face value. The low yield would be explained by not marking to market.
Quote Originally Posted by Snoopy View Post
If you look at the 31st July 2023 monthly report here
https://smartshares.co.nz/types-of-f...sh/nzbondtrust

Under 'Portfolio Characteristics', the fund yield is listed as 5.59%. If I look at the portfolio constituents from post 14, there is only one bond with a coupon rate greater than that: Meridian Energy's 5.91% bond. This indicates to me that the capital value of those lower interest rate bonds must have been marked down.

There is no other way to achieve a 5.59% current portfolio yield, unless these mark downs were done.
I should add that there is a third option which sits between 'the NZB portfolio was marked down' and 'the NZB portfolio was not marked down'. Perhaps the portfolio was only partially marked down, triggered by the fall in capital value of bonds actually sold at a loss, while the remainder of the bonds -still on the books- are held at purchase value?

SNOOPY