DaveS wrote:The problem isn't the fund it's the index. The idea of the agg. bond index is to create a statistically accurate reflection of the bond market. If they have a 30 year bond one year, the next year you would think it would be the 29 year bond. No, they sell it and replace it with a more statistically correct 29 year bond. Then the next year they sell that and get a statistically perfect 28 year bond. So the turnover is fairly high. On the other hand brokerage commissions are not high these days with computerized trading, and bonds don't generate a lot of short term capital gains. So the turnover is not that important. Dave
Geologist wrote:If you read the Annual Report (I always recommend doing so), you will see that of the 80% turnover for 2012, 49% was attributable to "mortgage-dollar roll activity." So, the base turnover was only 31%. My recollection is that mortgage dollar role activity was only included in turnover in relatively recent years.
There is a whole paragraph (A3) in the Notes to Financial Statements explaining mortgage dollar rolls. Download the Annual Report if you want to find out, as I won't repeat it here.
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