My understanding, perhaps faulty, is that "the" average duration of a bond fund accurately
expresses the effect of a small, instantaneous
change in interest rates on the NAV of the fund, and thus the flavor of bond in the fund, yield, etc. wouldn't matter. There's some (literally) second-order effect called "convexity," meaning that for larger
changes in interest rates, the effect isn't proportional--a 5% interest rate rise does less than five times the damage of a 1% rise, and that the convexity
varies for different bond flavors. Given the utter inability of anyone to predict interest rates at all, I personally don't "get" the point of fussing about convexity, other than to say that of course riskier bonds are going to be generally less predictable in all respects.
I also don't "get" the frequent statements that corporate bonds have higher yield than Treasuries, if they're talking about anything more than just plain compensation for the extra credit risk. Seriously, during the time period shown would it have mattered much to anyone whether they were in the Vanguard Intermediate-Term Treasury fund, or the Vanguard Intemediate Term Investment Grade [Corporate bond] fund--unless
they'd had a pressing needed to liquidate right during 2008-2009? Doing a rough calculation, (33,366.55/31,443.35)^(1/20.2) = 0.3%, i.e. Vanguard Intermediate-Term Investment Grade earned 0.3% more than Vanguard Intermediate-Term Treasury, and you certainly paid for that with some excitement around 2008-2009.
Also, note the difference during the bond bubble of 1993 and the bond massacre of 1994. Difference, as in, what difference? (Nope, not a whole lot if you move the endpoints to bracket those years. Try it
Look, I know growth charts are a blunt instrument. Yes, those nasty old dividends those pesky bond funds keep paying make it harder to see the fluctuations in NAV. But I'd at least use them to put the qualitative statements made by connoisseurs into perspective. If this did that, these would do one thing and those would do the other--but you don't know whether this will do that. If we had ham, could have ham and eggs, if we had some eggs.
I sure hope people aren't getting fooled by three
-year return numbers, which still put the starting point inside that nasty little notch.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.