How should investors interpret the weighted Yield-to-Maturity (YTM) figures for this fund?
RT: Implied YTM on a bond is broadly defined as a measurement of total return on a bond’s coupon and capital gain or loss from the time of purchase until maturity. In this definition, coupons are assumed to be reinvested at YTM rate. In reality, the realised YTM on a bond may be higher or lower than what has been implied by definition above. If coupons are reinvested at higher rates than implied YTM, realised YTM would tend to be higher (and vice versa). There are other forms of calculating YTM on securities with embedded options. Yield-to-Put (“YTP”) and Yield-to-Call (“YTC”) are calculated the same way as YTM except that put and call dates are used instead of maturity dates. This gives a more equitable measurement of total return should such securities be putted or called on their respective option dates. iFAST: What are the key risks? RT: Like most fixed income funds, the key risks of EIF are but not limited to following: Interest rate risk Credit risk of Issuers Liquidity risk Fore
