Will Vanguard add Bond Fund/ETF for Emerging Markets?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.

Will Vanguard add Bond Fund/ETF for Emerging Markets?

Postby Jagman » Sat Feb 09, 2013 12:11 pm

Thoughts? ...it seems that this asset class has performed well over an extended period of time. Fidelity's FNMIX has a great record, despite its costs.
Jagman
 
Posts: 89
Joined: Sat Jul 19, 2008 5:38 pm

Re: Will Vanguard add Bond Fund/ETF for Emerging Markets?

Postby Jagman » Sat Feb 09, 2013 12:52 pm

Would you make a cheap emerging markets bond fund/etf part of your portfolio?
Jagman
 
Posts: 89
Joined: Sat Jul 19, 2008 5:38 pm

Re: Will Vanguard add Bond Fund/ETF for Emerging Markets?

Postby nisiprius » Sat Feb 09, 2013 2:21 pm

They announced one in 2011, but haven't launched it yet.
Vanguard wrote:Vanguard Emerging Markets Government Bond Index Fund will seek to track the investment performance of the Barclays Emerging Markets Sovereign Index (USD). The target benchmark features approximately 200 government bonds in 39 countries. By investing solely in U.S. dollar denominated international bonds, the fund will not subject U.S.-based investors to currency risk.
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.
User avatar
nisiprius
Advisory Board
 
Posts: 25434
Joined: Thu Jul 26, 2007 10:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Will Vanguard add Bond Fund/ETF for Emerging Markets?

Postby am » Sat Feb 09, 2013 2:36 pm

Thought bond portion of the portfolio is for reducing volatility and lowering risk. Does not seem like EM bonds would fit into most boglehead portfolios. Why not just increase allocation to EM stocks?
am
 
Posts: 1564
Joined: Sun Sep 30, 2007 10:55 am
Location: Illinois

Re: Will Vanguard add Bond Fund/ETF for Emerging Markets?

Postby nisiprius » Sat Feb 09, 2013 4:42 pm

am wrote:Thought bond portion of the portfolio is for reducing volatility and lowering risk. Does not seem like EM bonds would fit into most boglehead portfolios. Why not just increase allocation to EM stocks?
Well, the draft prospectus says "Credit risk should be moderate for the Fund because it purchases investment-grade and high-yield bonds." They are dollar-denominated, so no currency risk. So the volatility should be much lower than for emerging markets stocks. But as to what the big advantage is supposed to be, I don't know. I suspect it turns out that emerging markets' interest rates are currently higher than U.S. interest rates, i.e. recency. I haven't bothered to check if that's true. Anyone know?
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.
User avatar
nisiprius
Advisory Board
 
Posts: 25434
Joined: Thu Jul 26, 2007 10:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry


Return to Investing - Theory, News & General

Who is online

Users browsing this forum: BigJohn, bowtie, Erhan, Exabot [Bot], Garco, Johm221122, Khanmots, MnD, SnowSkier and 58 guests