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Acknowledgement
This publication was made possible by a generous grant from the FINRA Investor
Education Foundation.
(12/14/2007)
Inquiries and/or comments should be directed to Prof. David Fehr at the Center for Financial
Studies at Southern New Hampshire University: (603) 644-3197 or d.fehr@snhu.edu.
Internet Resources for Bond, Bond Mutual Fund
& Exchange-Traded Fund (ETF) Investors
Page 3 of 11
Web Site Documentation
The glossary section of FINRA‟s Mutual
http://apps.finra.org/Investor_Information
Fund/ETF Expense Analyzer nicely
/Smart/Bonds/000100.asp
summarizes the differences between
mutual funds and ETFs: An excellent tutorial describing both
individual bonds and bond funds; would
“Exchange-traded funds, like index mutual
provide useful background reading for both
funds, are baskets of stocks that track a
students and teachers.
particular stock market index, such as the
Standard and Poor's 500 Index. But ETFs
http://apps.finra.org/Investor_Information
trade just like stocks. You can buy or sell
/Smart/Bonds/605000.asp
shares during market hours, and the prices
of ETFs change throughout the trading day A section of the FINRA bond tutorial
- just as with stocks. When you buy or sell describing the differences between bonds
mutual funds, on the other hand, shares versus bond funds.
are always priced at the shares net asset
value (NAV) as of the close of the trading http://apps.finra.org/Investor_Information
day. ETFs differ from mutual funds in /Smart/Bonds/000100.asp
several ways. Unlike mutual funds, ETFs
A section of the FINRA bond tutorial
don't have sales charges or loads. Rather,
describing individual bond types and
you are typically charged a commission
characteristics.
when you buy or sell an ETF. Like mutual
funds, you will have to pay annual fund
operating expenses.” http://apps.finra.org/Investor_Information
/Smart/Bonds/601000.asp
ETFs can often be less costly for the
investor because the ETF is bought directly A section of the FINRA bond tutorial
from a broker – there is no need for an ETF describing bond mutual funds
company to market the product to
http://apps.finra.org/Investor_Information
individual investors. While there is
/EA/1/mfetf.aspx
typically a brokerage commission to
purchase ETFs, it is often the case that the A useful tool to analyze expenses for
management fee and administrative cost to mutual funds and ETFs; quite
operate the ETF can be lower because comprehensive.
marketing and advertising costs are
http://www.sec.gov/answers/etf.htm
nonexistent. However, investors will need
to realize that they will face a bid/offer The U.S. Securities and Exchange
spread when trading ETFs, analogous to Commission‟s definition page for ETFS;
the spread in trading individual stocks. contains links to more information.
The bid is the price that a broker will pay
http://screen.yahoo.com/bonds.html
an investor who wishes to sell a security.
The offer is the price at which a broker is Provides a comprehensive bond screener
willing to sell a security and is higher than tool that can be used to identify a wide
the bid price, hence a bid/offer spread. range of treasury, corporate and municipal
bonds.
ETFs have become a highly successful
financial product as evidenced by the vast http://finance.yahoo.com/etf/browser/mkt
array of ETFs available. The student will
Provides an ETF browser to display ETFs
have the opportunity to view many
sorted by size, performance, volume or
ETF variants during the ETF website
fund family.
exercise.
Page 4 of 11
http://finance.yahoo.com 35-minute Lesson Plan:
A gateway to lots of finance-related A reasonable strategy for a shorter class
information and tools, including the two session may be to eliminate consideration
internet tools listed above. of individual bond investments (Segment
2) and concentrate on the other segments.
http://www.kiplinger.com/personalfinance/
tools/fundfinder/ 5 minutes: Segment 1. Discuss financial
aspects of bonds; distribute WEBSITES
A search tool that identifies mutual funds
handout and BOND MUTUAL FUNDS &
that meet criteria set by the user, such as
THEIR CHARACTERISTICS worksheet.
minimum initial investment, volatility, load,
etc.; also provides flexibility in how data 15 minutes: Segment 3. Use the Viewing
may be displayed. Bond Mutual Funds and Their
Characteristics assignment below, as
http://www.kiplinger.com
well as the BOND MUTUAL FUNDS &
A gateway to lots of finance-related THEIR CHARACTERISTICS worksheet to
information and tools, including the explore bond mutual funds.
internet tool listed above.
15 minutes: Segment 4. Discuss and view
different types of ETFs according to the
Lesson Plan and Relevant Assignments
Viewing ETFs and Their
Characteristics assignment below.
Materials Needed:
WEBSITES handout
Assignments:
BOND MUTUAL FUNDS & THEIR
Segment 2 – Viewing Bonds and Bond
CHARACTERISTICS worksheet
Characteristics
The assignment presents the opportunity
90-minute Lesson Plan:
to investigate treasury, corporate and
10 minutes: Segment 1. Discuss financial municipal bonds. Bonds that meet various
aspects of bonds; distribute WEBSITES criteria can be identified and studied.
handout and BOND MUTUAL FUNDS &
URL: http://finance.yahoo.com
THEIR CHARACTERISTICS worksheet.
1. Move the cursor over the “Screener”
20 minutes: Segment 2. Encourage
under the “Bonds” heading on the left
students to use the bond screener
of the webpage. Click on “Screener”.
website to identify bonds that meet
Alternatively, you may go directly to
various criteria using the Viewing
the screener at
Bonds and Bond Characteristics
http://screen.yahoo.com/bonds.html.
assignment below.
2. The new window presents an input
30 minutes: Segment 3. Use the Viewing
screen that will find and display bonds
Bond Mutual Funds and Their
based on the criteria selected. The user
Characteristics assignment below, as
will need to select “bond type” and
well as the BOND MUTUAL FUNDS &
specify “bond criteria” search
THEIR CHARACTERISTICS worksheet to
parameters to input other desired bond
explore bond mutual funds.
characteristics. Enter the necessary
30 minutes: Segment 4. Discuss and view “bond type” and “bond criteria” fields
different types of ETFs according to the and then click “Find Bonds” near the
Viewing ETFs and Their bottom of the webpage.
Characteristics assignment below.
3. For the high school audience, the
facilitator may want to stick with
treasury and corporate bonds as “bond
Page 5 of 11
type” choices. To make the session may be helpful when used in conjunction
manageable, the facilitator might with the online Mutual Fund Finder to limit
choose a few “bond criteria” on which the sample of funds from which to make a
to concentrate, such as maturity and final selection. This questionnaire is similar
debt rating, and explore each in turn. to one found in the Investing in Equity
To do so, the facilitator will want to Mutual Funds companion module of this
provide min and max inputs for all the series.
other “bond criteria” and let students
URL: http://kiplinger.com
experiment with the criteria under
study. The results may be sorted by 1. Move the cursor over the “PERSONAL
clicking on any column heading. FINANCE” heading near the top left of
the webpage and click to proceed.
For example, to study US Treasuries,
select the “Treasury” box. The 2. Click on the “Tools” link on the upper
facilitator might set the minimum and left of the page. Next click on “Funds
maximum maturities to 10 years and Tools” under “Investing Tools” on the
30 years, respectively, and set the right side of the webpage. Finally,
“Callable” option to No. Note that a under the Funds title, click on
Debt Rating Range is not necessary for “Kiplinger‟s Mutual Fund Finder”.
US Treasuries. Some relationships may Alternatively, you may go directly to
be pointed out: the mutual fund finder at
http://www.kiplinger.com/personalfinan
a) In general, YTM increases as
ce/tools/fundfinder/.
maturity increases.
3. The student will now want to “Select
b) Current yield = coupon/price
Fund Type” and “Select Performance
Similarly for corporate bonds, the Criteria”. For this exercise, select
facilitator might again set the “Callable” “Taxable Bonds” at the fund universe
option to No and set the minimum and entry. “Intermediate-Term” would be a
maximum maturities both to the same good choice for fund style. The
horizon. Another relationship may be facilitator may encourage a discussion
pointed out: of how choice of fund style is affected
by investment horizon. As in the
c) In general, a higher credit
exercise above for individual bonds, the
rating, meaning less risk, results
facilitator will want to concentrate on
in a lower YTM, or lower return.
selected “Select Performance Criteria”
fields. To be consistent with the first
Segment 3 – Viewing Bond Mutual exercise, you might choose the avg.
Funds and Their Characteristics maturity and avg. bond rating fields. It
would also be useful to explore
The facilitator may want to review why a
selections related to fees and
bond mutual fund might be appropriate for
management expenses. Expect to find
retail investors interested in a fixed income
many bond funds displayed for most
component to their portfolio, comparing
choices of performance criteria.
the advantages and disadvantages of
purchasing and holding individual bonds 4. Investigate aspects of a bond mutual
and bond mutual funds (as discussed in the fund using the financial data provided
background material). This discussion will with each fund. The student can click
motivate the need to identify potential on any title heading to get a pop-up
bond mutual fund investments. Direct box defining that particular term.
students to complete the BOND MUTUAL
FUNDS & THEIR CHARACTERISTICS
worksheet prior to visiting the website.
This sample fund selection questionnaire
Page 6 of 11
Segment 4 – Viewing ETFs and Their
Characteristics
In this website exercise, financial
information will be displayed for ETFs
displayed using alternative search and
sorting criteria.
URL: http://finance.yahoo.com
1. Click on the “ETFs” heading in the blue
box on the left of the webpage. Click
on “View ETFs” or select a specific
“by…” under the “View ETFs” heading.
Alternatively, you may go directly to
the ETF Center at
http://finance.yahoo.com/etf/browser/
mkt.
2. The “Exchange-Traded Funds (ETF)
Center” page appears. This page
provides a list of available ETFs that
meet the criteria as well as financial
characteristics of each. By clicking any
ETF characteristic, the ETF list can be
sorted in either ascending or
descending order based on the criteria
selected. This page presents an ideal
venue to view ETF details and their
relevance to investors.
Page 7 of 11
INTERNET RESOURCES FOR BOND, BOND MUTUAL FUND
& EXCHANGE-TRADED FUND (ETF) INVESTORS
WEBSITES
http://apps.finra.org/Investor_Information/Smart/Bonds/000100.asp
An excellent tutorial describing both individual bonds and bond funds; would provide useful
background reading for both students and teachers.
http://apps.finra.org/Investor_Information/Smart/Bonds/605000.asp
A section of the FINRA bond tutorial describing the differences between bonds versus bond
funds.
http://apps.finra.org/Investor_Information/Smart/Bonds/301000.asp
A section of the FINRA bond tutorial describing individual bond types and characteristics.
http://apps.finra.org/Investor_Information/Smart/Bonds/601000.asp
A section of the FINRA bond tutorial describing bond mutual funds
http://apps.finra.org/Investor_Information/EA/1/mfetf.aspx
A useful tool to analyze expenses for mutual funds and ETFs; quite comprehensive.
http://www.sec.gov/answers/etf.htm
The U.S. Securities and Exchange Commission‟s definition page for ETFS; contains links to
more information.
http://screen.yahoo.com/bonds.html
Provides a comprehensive bond screener tool that can be used to identify a wide range of
treasury, corporate and municipal bonds.
http://finance.yahoo.com/etf/browser/mkt
Provides an ETF browser to display ETFs sorted by size, performance, volume or fund family.
http://finance.yahoo.com
A gateway to lots of finance-related information and tools, including the two internet tools
listed above.
http://www.kiplinger.com/personalfinance/tools/fundfinder/
A search tool that identifies mutual funds that meet criteria set by the user, such as minimum
initial investment, volatility, load, etc.; also provides flexibility in how data may be displayed.
http://www.kiplinger.com
A gateway to lots of finance-related information and tools, including the internet tool listed
above.
Page 8 of 11
INTERNET RESOURCES FOR BOND, BOND MUTUAL FUND
& EXCHANGE-TRADED FUND (ETF) INVESTORS
Mark your criteria for selecting a mutual fund, keeping these things in mind:
Do you want to invest globally or do you want to confine your investment choices to the US?
(circle one) Global US only
How much money do you have to invest, i.e., your initial investment? _____________
Based on your criteria, use the online Fund Finder to select two mutual funds. Note the funds,
their ticker symbols, and Total Return 5-year here. Click on the ticker symbol of each fund
and note its NAV per share.
Worksheet Page 1 of 2
Page 9 of 11
INTERNET RESOURCES FOR BOND, BOND MUTUAL FUND
& EXCHANGE-TRADED FUND (ETF) INVESTORS
All
selections for
Fund style: Long-Term Fund universe,
Intermediate-Term Fund style,
Avg. maturity,
2. Select Performance Criteria
Avg. bond
Data is updated monthly and is from the close of the last
1 Year total return: any
trading day of December
rating, and
any
Min.
3 Year total return:
Select do not display if you do not wish to see this investment
any information with your results
5 Year total return: based on
information
S & P star rankings: any
outlined on
any
You must select a fund universe for page 1.
Down market:
down market screen to work
Worksheet Page 2 of 2
Page 10 of 11
INTERNET RESOURCES FOR BOND, BOND MUTUAL FUND
& EXCHANGE-TRADED FUND (ETF) INVESTORS
Mark your criteria for selecting a mutual fund, keeping these things in mind:
Do you want to invest globally or do you want to confine your investment choices to the US?
(circle one) Global US only
How much money do you have to invest, i.e., your initial investment? ___$5000_____
Based on your criteria, use the online Fund Finder to select two mutual funds. Note the funds,
their ticker symbols, and Total Return 5-year here. Click on the ticker symbol of each fund
and note its NAV per share.
Fund #2: __First American Intm Term Bond Y___ Ticker: ___FINIX____ NAV:___$9.70___
#shares to purchase = NAV/Initial Investment: __51.55___
Page 11 of 11