TIPS, secondary mkt, yield to worst/maturity

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jt90505
Posts: 23
Joined: Wed Nov 28, 2018 8:10 pm

TIPS, secondary mkt, yield to worst/maturity

Post by jt90505 »

Hopefully this is a simple question regarding the mechanics of buying TIPS on the secondary market.

When buying at auction, I know what my real yield is (held to maturity) for any TIPS I purchase.

If I buy on the secondary market, is the 'yield to worst' (same as "yield to maturity" on fidelity web site) the real yield for the TIPS bond, held to maturity?

For context: The Fidelity rep I spoke with said the real yield for TIPS held to maturity was not shown on their web page showing available secondary TIPS. He did not provide an answer why the information was not available that I was capable of understanding. Comparing the yields for listed 10 year TIPS to the recent auction results, the yield to worst is roughly equivalent to the auction results...leading me to believe that 'yield to worst' is the real yield I'll receive. What am I missing?

thank you
venkman
Posts: 1220
Joined: Tue Mar 14, 2017 10:33 pm

Re: TIPS, secondary mkt, yield to worst/maturity

Post by venkman »

Yield To Worst should be exactly the same as Yield To Maturity for any non-callable bond.
stlutz
Posts: 5577
Joined: Fri Jan 02, 2009 1:08 am

Re: TIPS, secondary mkt, yield to worst/maturity

Post by stlutz »

If I buy on the secondary market, is the 'yield to worst' (same as "yield to maturity" on fidelity web site) the real yield for the TIPS bond, held to maturity?
Yes.
Topic Author
jt90505
Posts: 23
Joined: Wed Nov 28, 2018 8:10 pm

Re: TIPS, secondary mkt, yield to worst/maturity

Post by jt90505 »

Thanks, That is the answer was expecting. (The yield to maturity is the 'real' yield for a TIPS for bonds purchased in secondary market)

Don't understand why I could not get the same answer from Fidelity. Very troubling.
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