Bond there a catch here?

Discussion in 'ETFs' started by dac8555, Sep 5, 2006.

  1. dac8555


    Hi guys. I am starting to exclusively trade ETFs. I shouldnt advertise this...but it really sems to be too good to be true.

    Check out SHY. this is the lehman 1-3 year bond ETF.

    -what do you see there?
    on the last day of each month it takes a drop of between 20 and 75 cents before it starts the next month. I am gussing becuse it is a coupon adjustment. not a lot...i know...but seemingly quick and easy.

    am i missing something? is that just too easy?
  2. Haven't traded it b/4, but one can assume that if you short you're going to be paying that drop out in dividend/coupon.
  3. I would guess the coupon payout is not re-invested.
  4. dac8555


    right, i would assume the same thing on the coupon...but if you look at the other bond funds...IEF, TLT..they dont take that monthly drop.

    maybe if i contacted Ishares and asked for a prospectus?