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iShares iBoxx $ Invst Grade Crp Bond Message Board

  • peristentone peristentone Jan 18, 2010 3:10 PM Flag

    Does LQD Chase a $100 Par Value?

    I originally (apparently incorrectly) believed that LQD's trading value was an approximate discount or surplus to a $100 par value. Apparently LQD is not trading like a bond, but more like a stock. My question is how did LQD manage to grow steadily in value since its start in 2003? Is this reflective of capital gains on bond trades within the portfolio of bonds?

    Where do we find:

    1) Discount or surplus to net asset value for LQD? I tried the trick of adding an "X" before and after the symbol (e.g., XLQDX) but this didn't find a symbol on Yahoo.

    2) How can we determine the value relative to par value of the bond holdings within LQD?

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    • this is really more of a guess than anything else, but since no one has answered ill throw it out there.

      I think it is based on $100 face value, but since there is no maturity date on an etf, the relation between f and p is not particularly relevant in determining cash flow or coupon payment. Trading where it is today, at 103 and change seems like its at a premium, but if you look at the 5 year chart it almost always has been.

      What I want to know is how are coupon payments paid? Is it semi-annual like treasury? or quarterly like a stock? I guess its not particularly relevant, but if your using a DRIP with a significant sum of principle it does make a difference

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