For sovereign bond, I saw two carry calculations: one would be forward yield - spot yield, the other would be spot yield - repo rate. I would assume these 2 methods result in same or very close result. But that is not the case. Did I misunderstand something here?
For example, a 5 year bond with 5% coupon and 5% yield, current price = 100, say 4% repo rate, then the carry would be 5% - 4% = 1% based on the yield minus repo rate method. The 1 year forward price would be 99 (=100-(5-4)), and with the 5% coupon and 4 years to maturity, the 1 year forward yield would be 5.284%, then carry would be 5.284% - 5% = 0.284% (based on forward yield minus spot yield method). 1% versus 0.284%, this is quite different, right?