Hi Guys, new to the forums and would appreciate some advice
I donít have much experience in investing but looking to broaden my knowledge as much as possible
Ok so my question is in regards to the returns that bond funds that are backed exclusively by mortgages can boast returns around 8% pa when the interest they are charging on loans currently are around the 6% mark. How can you have a sustainable return of 8%pa if the underlying asset is earning 6% pa?
I realise that its not this simple but is there something I am completely missing on this?