Calculating Alpha for Bond ETFs
I figured this might be the most relevant forum, but feel free to move the post if necessary. I'm having a difficult time calculating the Alpha for two Vanguard bond ETFs - VGLT and VGIT. Unlike the equities in my portfolio, I'm not sure what the benchmark rate should be. Should it be the dividend yield or yield to maturity of BND? Should I just use TNX (risk free rate), which is already used to calculate the Expected Rate of Return for equities (although that might mess up the equation)? Does alpha not apply to bond ETFs?
Thanks for any insight :)
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