VG Total International Bond Fund is open
VG Total International Bond Fund is open
I noticed, this morning, that Vanguard has opened their Total International Bond Funds (VTIBX,VTABX). Vanguard suggests a starting allocation of 20% of total fixed income assets to international bonds.
What say you? I have no particular questions to ask. I am more interested in seeing where a discussion leads.
What say you? I have no particular questions to ask. I am more interested in seeing where a discussion leads.
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Re: VG Total International Bond Fund is open
I have no plans to invest in international bonds, same for non-domestic equities.
Re: VG Total International Bond Fund is open
I'm looking forward to learning the average duration and country mix when that information becomes available.
Can anyone share its expected correlation to other asset classes?
Can anyone share its expected correlation to other asset classes?
Re: VG Total International Bond Fund is open
Thanks for posting. This fund has risk level of only 2, much less risk than their emerging markets bond fund at risk level 5. There is no purchase fee, unlike the .35% purchase fee for emerging markets bond fund. Admiral shares have a .2% ER. I am likely to purchase some.
Best Wishes, SpringMan
Re: VG Total International Bond Fund is open
It's nice to have options in international bond funds with low expense ratios, but... opened today. I haven't managed to find a yield, a duration, holdings... Not much to go on so far.
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Re: VG Total International Bond Fund is open
Vanguard updated the risk level and it is now a 3.SpringMan wrote:Thanks for posting. This fund has risk level of only 2, much less risk than their emerging markets bond fund at risk level 5. There is no purchase fee, unlike the .35% purchase fee for emerging markets bond fund. Admiral shares have a .2% ER. I am likely to purchase some.
Re: VG Total International Bond Fund is open
It is still showing up as 2 on my screen.brazil_will wrote:Vanguard updated the risk level and it is now a 3.SpringMan wrote:Thanks for posting. This fund has risk level of only 2, much less risk than their emerging markets bond fund at risk level 5. There is no purchase fee, unlike the .35% purchase fee for emerging markets bond fund. Admiral shares have a .2% ER. I am likely to purchase some.
Best Wishes, SpringMan
Re: VG Total International Bond Fund is open
20% might be a decent long term goal. But I'd max out at not much above 5% right now. Between natural new product shyness, Vanguards tendency to drop costs over time, and the likely (slight, not disastrous!) upcoming dip in bond returns, figure five years before everything shakes out to the point I'd want it taking a significant part in the portfolio.
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Re: VG Total International Bond Fund is open
Think he means the Emerging Market Bond fund. A risk rating of 5 never really made sense for that fund.SpringMan wrote:It is still showing up as 2 on my screen.brazil_will wrote:Vanguard updated the risk level and it is now a 3.SpringMan wrote:Thanks for posting. This fund has risk level of only 2, much less risk than their emerging markets bond fund at risk level 5. There is no purchase fee, unlike the .35% purchase fee for emerging markets bond fund. Admiral shares have a .2% ER. I am likely to purchase some.
Retirement investing is a marathon.
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Re: VG Total International Bond Fund is open
By the time that my IRA reaches the point where I can buy in for 20% of my bond allocation, I'll do so. Might be a few years off though...
Stock goes up, stock goes down. Stock goes up, stock goes down. -- Homer J. Simpson (paraphrased)
Re: VG Total International Bond Fund is open
Indeed, I see Emerging Markets Bond fund is now a risk level 3. Thanks for clarifying.kenyan wrote:Think he means the Emerging Market Bond fund. A risk rating of 5 never really made sense for that fund.SpringMan wrote:It is still showing up as 2 on my screen.brazil_will wrote:Vanguard updated the risk level and it is now a 3.SpringMan wrote:Thanks for posting. This fund has risk level of only 2, much less risk than their emerging markets bond fund at risk level 5. There is no purchase fee, unlike the .35% purchase fee for emerging markets bond fund. Admiral shares have a .2% ER. I am likely to purchase some.
Best Wishes, SpringMan
Re: VG Total International Bond Fund is open
The fund will attempt to track the Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged).jidina80 wrote:I'm looking forward to learning the average duration and country mix when that information becomes available.
Can anyone share its expected correlation to other asset classes?
Re: VG Total International Bond Fund is open
Here are stats re duration and yield from grok87: http://www.bogleheads.org/forum/viewtop ... 0#p1669210jidina80 wrote:I'm looking forward to learning the average duration and country mix when that information becomes available.
Can anyone share its expected correlation to other asset classes?
Here is Vanguard's research paper regarding international bonds. http://www.vanguard.com/pdf/icrifi_032012_high.pdf. Figure 7 on page 10 shows the changes in volatility of adding a hedged international bond fund. Notice, however, that the difference in volatility between 0% international bonds and 100% hedged international bonds is a between 0.0 and 0.3. IMO, that's noise.grok87 wrote:Correct. It is the Barclays Global Agg Ex-USD Float Adjusted RIC Capped index. As per the subscription only Barclays site here are some of the stats:Archie Sinclair wrote:I think the index is created for Vanguard. It's tailored to Vanguard's specific needs/wants: non-US, float adjusted, amount in any one country capped, US dollar hedged.jidina80 wrote:Yes, but does the Barclays Index exist now, or is that something new being created for the Vanguard fund? If it exists now, where can I find it's duration and yield? I could not find it on Barclays website.
Duration: 6.65
yield 1.71%
now these stats are for the non-hedged index. I don't know how the currency hedging would affect things. I think Vanguard has said they think the currency hedging is worth about 10 bps. So you could knock down the yield to about 1.61% I guess.
hope this helps
cheers,
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Re: VG Total International Bond Fund is open
Thanks for sharing this. I don't even see a price yet.
Kevin
Kevin
If I make a calculation error, #Cruncher probably will let me know.
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Re: VG Total International Bond Fund is open
From the Statutory Prospectus, speaking first of average maturity (not exactly what you asked for, but some information nonetheless):jidina80 wrote:I'm looking forward to learning the average duration and country mix when that information becomes available.
...
The Fund maintains a dollar-weighted average maturity consistent with that of
the Index, which generally ranges between 5 and 10 years and, as of March 31, 2013,
was 8.2 years.
The Statutory Prospects (don't be fooled and read the Summary one which says nothing) is available from a link here:As of March 31, 2013, the target index for the Fund held a substantial percentage of
its assets in bonds of issuers located in just a handful of countries, as shown in the
following table:
...
Barclays Global Aggregate ex-USD
Float Adjusted RIC Capped Index (USD Hedged)
Japan 22.5%
France 11.6
Germany 11.0
United Kingdom 7.9
Italy 7.9
Canada 5.8
Spain 5.5
Total 72.2%
https://personal.vanguard.com/us/funds/ ... IntExt=INT
PJW
[Edited to point out the difference between the question on average duration, and the answer regarding average maturity.]
Last edited by Phineas J. Whoopee on Fri May 31, 2013 1:33 pm, edited 1 time in total.
Re: VG Total International Bond Fund is open
There's too much weird or international stuff in TBM for me already, which I avoid, so why go to something worse? -- Tet
Re: VG Total International Bond Fund is open
For anyone interested, outside the US Vanguard aleady provides a fund based on the "Barclays Global Aggregate Float Adjusted Bond Index". This particular fund includes US bonds, and there are various institutional classes, demoniniated in different currencies - including USD and USD-hedged classes. The prospectus and fund facts sheet can be accessed as follows:
https://www.vanguard.co.uk/documents/po ... pectus.pdf
https://www.vanguard.co.uk/documents/po ... l_bond.pdf
As of April 30th, the key metrics of this "Global Bond" fund (and Barclays GA Float Adjusted Index Hedged) are:
- Number of bonds: 9,009 (15,176)
- Effective YTM: 1.51% (1.55%)
- Average Coupon: 3.5% (3.4%)
- Average Maturity: 7.8 years (7.8 years)
- Average Quality: AA- (AA-)
- Average Duration: 5.9 years (5.9 years)
I wonder why they don't just make this available within the US also, as it seems like they have done all the necessary legwork.
https://www.vanguard.co.uk/documents/po ... pectus.pdf
https://www.vanguard.co.uk/documents/po ... l_bond.pdf
As of April 30th, the key metrics of this "Global Bond" fund (and Barclays GA Float Adjusted Index Hedged) are:
- Number of bonds: 9,009 (15,176)
- Effective YTM: 1.51% (1.55%)
- Average Coupon: 3.5% (3.4%)
- Average Maturity: 7.8 years (7.8 years)
- Average Quality: AA- (AA-)
- Average Duration: 5.9 years (5.9 years)
I wonder why they don't just make this available within the US also, as it seems like they have done all the necessary legwork.
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Re: VG Total International Bond Fund is open
Well, that just goes to show that Vanguard reps don't always give you the straight dope, as I specifically asked them (via their normal online account "secure email") whether the five was a goof, and got a reply stating in part:SpringMan wrote:Indeed, I see Emerging Markets Bond fund is now a risk level 3. Thanks for clarifying.kenyan wrote:Think he means the Emerging Market Bond fund. A risk rating of 5 never really made sense for that fund.SpringMan wrote:It is still showing up as 2 on my screen.brazil_will wrote:Vanguard updated the risk level and it is now a 3.SpringMan wrote:Thanks for posting. This fund has risk level of only 2, much less risk than their emerging markets bond fund at risk level 5. There is no purchase fee, unlike the .35% purchase fee for emerging markets bond fund. Admiral shares have a .2% ER. I am likely to purchase some.
And went on to quote boilerplate from the prospectus.Vanguard Emerging Markets Government Bond Index Fund Investor Shares is correctly rated for risk potential at a five.
I thought a five was crazy until someone hit me with a clue-by-four and got me to look back to 1998 instead of just ten years. Now I think a three is crazy, and shame on them.
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Re: VG Total International Bond Fund is open
Duration: 6.65
yield 1.71%
I thought the return would be higher than 1.74% for that duration. My wishful thinking. I know it is an estimate so I think I'll wait a little.
yield 1.71%
I thought the return would be higher than 1.74% for that duration. My wishful thinking. I know it is an estimate so I think I'll wait a little.
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Re: VG Total International Bond Fund is open
Even with recent events in Japan (ie radical monetary loosening) 22% of that fund is paying 1% yield or less. The German 10 year Bund is paying 1.5%.Mitchell777 wrote:Duration: 6.65
yield 1.71%
I thought the return would be higher than 1.74% for that duration. My wishful thinking. I know it is an estimate so I think I'll wait a little.
Re: VG Total International Bond Fund is open
What is a "clue-by-four"? Do you think the Emerging Markets Bond Fund should be rated "four" rather than "five" (before) or "three" (now)? Or is this an idiom I am not familiar with?nisiprius wrote:I thought a five was crazy until someone hit me with a clue-by-four and got me to look back to 1998 instead of just ten years. Now I think a three is crazy, and shame on them.
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Re: VG Total International Bond Fund is open
Before you purchase it, consider that you may be influenced by a behavioral-economics bias of anchoring. The information about the Emerging Markets Bond Fund primed you to a certain level of expectation, which you may have found ridiculous. The new Total International Bond Fund looks so appealing in comparison that you may forget to consider if you need it at all.SpringMan wrote:Thanks for posting. This fund has risk level of only 2, much less risk than their emerging markets bond fund at risk level 5. There is no purchase fee, unlike the .35% purchase fee for emerging markets bond fund. Admiral shares have a .2% ER. I am likely to purchase some.
Victoria
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Market impact?
Bogleheads:
Is anyone concerned about the initial "market impact" when Vanguard begins buying million's (perhaps billions) of dollars of international bonds for the new international bond fund?
http://en.wikipedia.org/wiki/Market_impact
Best wishes.
Taylor
Is anyone concerned about the initial "market impact" when Vanguard begins buying million's (perhaps billions) of dollars of international bonds for the new international bond fund?
http://en.wikipedia.org/wiki/Market_impact
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: Market impact?
Taylor Larimore wrote:Bogleheads:
Is anyone concerned about the initial "market impact" when Vanguard begins buying million's (perhaps billions) of dollars of international bonds for the new international bond fund?
http://en.wikipedia.org/wiki/Market_impact
Best wishes.
Taylor
From the Bank of International Settlements : International debt securities - all issuers:
Total Developed Market debt securities (2012): 18.159 trillion dollars.
Total US debt securities (2012): 2.908 trillion dollars.
Net Developed Market debt securities (2012): 15.251 trillion dollars.
regards,
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Re: VG Total International Bond Fund is open
1) Portmanteau of "hit me with a clue stick" and "hit me with a two-by-four" (lumber size with a nominal cross-section of 2" x 4"). Evolution through jokes from "don't even have a clue" to "clueless" to various jokes about "he couldn't find a clue if..." My dad always liked "he couldn't empty a boot full of water if the instructions were printed on the heel of the boot."VictoriaF wrote:What is a "clue-by-four"? Do you think the Emerging Markets Bond Fund should be rated "four" rather than "five" (before) or "three" (now)? Or is this an idiom I am not familiar with?nisiprius wrote:I thought a five was crazy until someone hit me with a clue-by-four and got me to look back to 1998 instead of just ten years. Now I think a three is crazy, and shame on them.
Victoria
2) I'm giving up. I expected the fund to be placed at a three because I thought Vanguard was conservative. Then I thought they were right to put it at five because of what other emerging bond funds and Morningstar's category benchmark showed in 1998. Then I thought they were sleazy to revise it to three. Then Barry Barnitz hit me with whatever would be bigger than a clue-by-four, by pointing out actual data posted in the Bogleheads' wiki for the behavior of several EM bond indexes, not the actively managed funds I was looking at, and it doesn't look so bad. Quite possibly a three is reasonable after all.
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Re: VG Total International Bond Fund is open
HI:
Notice from prospectuses of the Vanguard balanced fund of funds that will be establishing allocations to the Vanguard Total International Bond Index Fund:
Notice from prospectuses of the Vanguard balanced fund of funds that will be establishing allocations to the Vanguard Total International Bond Index Fund:
The reallocation from domestic bonds to foreign bonds will occur in three stages. First, each Target Retirement(/LifeStrategy) Fund will redeem in kind—i.e., for securities rather than for cash—20% of its fixed income portfolio and simultaneously contribute the securities to(TIB) in exchange for Transition Shares of TIB.
Transition Shares are a private share class of TIB, created exclusively for the use of Vanguard funds of funds to facilitate the movement of billions of dollars of assets in the most efficient and cost-effective manner. The in-kind redemptions will be implemented by each Target Retirement(/LifeStrategy) Fund by redeeming proportionally from Vanguard Total Bond Market II Index Fund... (and proportionally from the Vanguard inflation Protected Securities Fund for those funds that hold it; any funds holding the Prime Money Market fund will redeem 100% of that holding (sic).
In the second stage of the reallocation, TIB will sell the contributed securities and use the cash proceeds to purchase foreign bonds consistent with its target index, a process known as the “transition.”
Third, when the transition is complete, each Target Retirement(/LifeStrategy) Fund will convert its ownership of TIB from Transition Shares to Investor Shares.
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Re: VG Total International Bond Fund is open
Well, interesting, so if they can convert from Transition Shares to Investor shares why can they convert from Investor to Admiral shares within a fund-of-funds?Barry Barnitz wrote:HI:
Notice from prospectuses of the Vanguard balanced fund of funds that will be establishing allocations to the Vanguard Total International Bond Index Fund:
The reallocation from domestic bonds to foreign bonds will occur in three stages. First, each Target Retirement(/LifeStrategy) Fund will redeem in kind—i.e., for securities rather than for cash—20% of its fixed income portfolio and simultaneously contribute the securities to(TIB) in exchange for Transition Shares of TIB.
Transition Shares are a private share class of TIB, created exclusively for the use of Vanguard funds of funds to facilitate the movement of billions of dollars of assets in the most efficient and cost-effective manner. The in-kind redemptions will be implemented by each Target Retirement(/LifeStrategy) Fund by redeeming proportionally from Vanguard Total Bond Market II Index Fund... (and proportionally from the Vanguard inflation Protected Securities Fund for those funds that hold it; any funds holding the Prime Money Market fund will redeem 100% of that holding (sic).
In the second stage of the reallocation, TIB will sell the contributed securities and use the cash proceeds to purchase foreign bonds consistent with its target index, a process known as the “transition.”
Third, when the transition is complete, each Target Retirement(/LifeStrategy) Fund will convert its ownership of TIB from Transition Shares to Investor Shares.
Warning: I am about 80% satisficer (accepting of good enough) and 20% maximizer
Re: VG Total International Bond Fund is open
I tend to be an early adopter so will be investing next week in Admiral classes of these two new international bond funds, but not more than a few percentages of total bond allocation at least to begin with. I think the idea of more fixed income diversification is good, and trust Vanguard more than other funds to invest in these classes of assets.
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Re: VG Total International Bond Fund is open
I just got my transaction confirmation for Total International Bond Index Admiral Shares. The price was $20.00 on 5/31. Wahoo! I look forward to seeing how this plays out 25 years from now.
Re: VG Total International Bond Fund is open
It is interesting that International Bond Funds are not doing well right now just as Vanguard has opened up this fund.
I own an International Bond fund that is down 7% for the year. Mostly the rise in the US Dollar. It shows the risks of these things.
I own an International Bond fund that is down 7% for the year. Mostly the rise in the US Dollar. It shows the risks of these things.
A fool and his money are good for business.
Re: VG Total International Bond Fund is open
I had an international bond fund that did really well over a number of years. I dumped it due to the astronomical costs.
So I might wind up investing in this one, but not yet. I like letting other folks be the beta versions testers.
So I might wind up investing in this one, but not yet. I like letting other folks be the beta versions testers.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri
Re: VG Total International Bond Fund is open
I believe the Vanguard fund is hedged against currencies, so this particular risk should not be an issue for this fund. Checking ... yep:nedsaid wrote: I own an International Bond fund that is down 7% for the year. Mostly the rise in the US Dollar. It shows the risks of these things.
KevinThe fund employs currency hedging strategies to protect against uncertainty in future exchange rates, so investment returns are expected to reflect the underlying performance of international bonds.
If I make a calculation error, #Cruncher probably will let me know.
Re: VG Total International Bond Fund is open
I would buy the Emerging Markets bond fund, except for that purchase fee.
I like that it is somewhat risky and that (Valuethinker mentioned this in another thread) it will hold bonds from EMs that aren't in the various stock funds. That seems like enough of a value proposition to get me interested.
I might consider it more of an equity holding than a bond holding if I ever get around to buying some.
I like that it is somewhat risky and that (Valuethinker mentioned this in another thread) it will hold bonds from EMs that aren't in the various stock funds. That seems like enough of a value proposition to get me interested.
I might consider it more of an equity holding than a bond holding if I ever get around to buying some.
"Index funds have a place in your portfolio, but you'll never beat the index with them." - Words of wisdom from a Fidelity rep
Re: VG Total International Bond Fund is open
Good point Momar about the purchase fee for the EM bond fund. Seems difficult to justify an additional fee for a hedged bond fund. I will only purchase the international bond fund for time being.momar wrote:I would buy the Emerging Markets bond fund, except for that purchase fee.
I like that it is somewhat risky and that (Valuethinker mentioned this in another thread) it will hold bonds from EMs that aren't in the various stock funds. That seems like enough of a value proposition to get me interested.
I might consider it more of an equity holding than a bond holding if I ever get around to buying some.
Re: VG Total International Bond Fund is open
does this include Greece bonds or from countries that have talks of defaulting?
Re: VG Total International Bond Fund is open
Hopefully not much, if any. That is why you go with an experienced bond fund manager like Vanguard, to pick good bonds.leod wrote:does this include Greece bonds or from countries that have talks of defaulting?
Re: VG Total International Bond Fund is open
It's an "investment grade" bond fund, so there is a minimum credit rating. I assume Greek bonds are still "junk" bonds, but maybe things have changed.leod wrote:does this include Greece bonds or from countries that have talks of defaulting?
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Re: VG Total International Bond Fund is open
I hope the bond fund contains bonds from such countries in exactly the same proportions that the market (and hence all other investors, in aggregate) value them.jdb wrote:Hopefully not much, if any.leod wrote:does this include Greece bonds or from countries that have talks of defaulting?
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Re: VG Total International Bond Fund is open
It will not hold a country below BBB- rating, AFAIK. Ie sub investment grade.ftobin wrote:I hope the bond fund contains bonds from such countries in exactly the same proportions that the market (and hence all other investors, in aggregate) value them.jdb wrote:Hopefully not much, if any.leod wrote:does this include Greece bonds or from countries that have talks of defaulting?
Greece is still sub investment grade AFAIK.
Note the index is 'capped' -- otherwise Japan would be something like 30% of all bonds-- instead it is around 20%. So countries are not in proportion to their bonds issued, fully.
The fund does exclude US Agency bonds. These bonds, chiefly mortgage-backed, are guaranteed by the US government (Freddie, Fannie, GNMA,FHB, TVA -- I think there's a couple of other issuing authorities) but are not US Treasury bonds. That means the US is conceptually underweighted in the index (but given the prepayment characteristic of US MBS, for good reason).
Re: VG Total International Bond Fund is open
Given that the fund tracks the Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged and its product summary states:Valuethinker wrote:The fund does exclude US Agency bonds. These bonds, chiefly mortgage-backed, are guaranteed by the US government (Freddie, Fannie, GNMA,FHB, TVA -- I think there's a couple of other issuing authorities) but are not US Treasury bonds. That means the US is conceptually underweighted in the index (but given the prepayment characteristic of US MBS, for good reason).
I'd assume the fund also won't hold US Treasury bonds either. So the US allocation should be 0% (at least in the US variety of this fund).This fund is designed to provide broad exposure to non-U.S. investment-grade bonds
https://personal.vanguard.com/us/funds/ ... IntExt=INT
Don't assume I know what I'm talking about.
Re: VG Total International Bond Fund is open
I'm curious as to why investment-grade-only bond indexes are popular, and not simply "total" bond market indexes. Focusing on investment-grade indexes seems akin to just having large-cap indexes.Valuethinker wrote:It will not hold a country below BBB- rating, AFAIK. Ie sub investment grade.
Greece is still sub investment grade AFAIK.
Note the index is 'capped' -- otherwise Japan would be something like 30% of all bonds-- instead it is around 20%. So countries are not in proportion to their bonds issued, fully.
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Why investment grade bonds?
ftobin:ftobin wrote: I'm curious as to why investment-grade-only bond indexes are popular, and not simply "total" bond market indexes. Focusing on investment-grade indexes seems akin to just having large-cap indexes.
Nearly all investing authorities believe that bonds are primarily to provide safety in a portfolio when stocks crash. This requires investment grade bonds which are the least correlated with stock movements.
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
Re: VG Total International Bond Fund is open
Where are folks holding the international bond fund?
401k?
IRA?
Taxable?
401k?
IRA?
Taxable?
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Re: VG Total International Bond Fund is open
xram:xram wrote:Where are folks holding the international bond fund?
401k?
IRA?
Taxable?
Taxable bonds should seldom be located in taxable accounts where dividends are taxed annually at higher income tax rates.
In my opinion, it makes little difference between holding them in a 401k or an IRA. Dividends (yield) accumulates tax-free in both these tax-advantaged accounts.
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
Re: VG Total International Bond Fund is open
Agree with Taylor in theory. But if your non taxable investments already allocated and muni bond allocation in taxable filled up but want more international fixed income then no choice but to put in taxable and bite bullet on taxes, which is what I have done.Taylor Larimore wrote:xram:xram wrote:Where are folks holding the international bond fund?
401k?
IRA?
Taxable?
Taxable bonds should seldom be located in taxable accounts where dividends are taxed annually at higher income tax rates.
In my opinion, it makes little difference between holding them in a 401k or an IRA. Dividends (yield) accumulates tax-free in both these tax-advantaged accounts.
Best wishes.
Taylor
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Re: VG Total International Bond Fund is open
A lot of institutional investors (eg insurance companies) and trustee investors cand *only* invest in investment grade bonds. They may hold 'fallen angels' (former IG bonds downgraded) for a certain time and up to a certain percentage, but at issue or secondary market they can only make new purchases of IG bonds.ftobin wrote:I'm curious as to why investment-grade-only bond indexes are popular, and not simply "total" bond market indexes. Focusing on investment-grade indexes seems akin to just having large-cap indexes.Valuethinker wrote:It will not hold a country below BBB- rating, AFAIK. Ie sub investment grade.
Greece is still sub investment grade AFAIK.
Note the index is 'capped' -- otherwise Japan would be something like 30% of all bonds-- instead it is around 20%. So countries are not in proportion to their bonds issued, fully.
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Re: VG Total International Bond Fund is open
Quite right. Sorry.G-Money wrote:Given that the fund tracks the Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged and its product summary states:Valuethinker wrote:The fund does exclude US Agency bonds. These bonds, chiefly mortgage-backed, are guaranteed by the US government (Freddie, Fannie, GNMA,FHB, TVA -- I think there's a couple of other issuing authorities) but are not US Treasury bonds. That means the US is conceptually underweighted in the index (but given the prepayment characteristic of US MBS, for good reason).I'd assume the fund also won't hold US Treasury bonds either. So the US allocation should be 0% (at least in the US variety of this fund).This fund is designed to provide broad exposure to non-U.S. investment-grade bonds
https://personal.vanguard.com/us/funds/ ... IntExt=INT
I was eliding 2 points, ie that the global government bond market indices are distorted by the absence of the US Agency market-- in and of itself, one of the largest bond markets in the world (but with very different investment characteristics because of prepayment risk).
Re: VG Total International Bond Fund is open
This is my situation. I do not have any more "room" in 401k or Roth IRAs right now for Vanguard's International Bond Fund but would like to add it to my portfolio.jdb wrote:Agree with Taylor in theory. But if your non taxable investments already allocated and muni bond allocation in taxable filled up but want more international fixed income then no choice but to put in taxable and bite bullet on taxes, which is what I have done.Taylor Larimore wrote:xram:xram wrote:Where are folks holding the international bond fund?
401k?
IRA?
Taxable?
Taxable bonds should seldom be located in taxable accounts where dividends are taxed annually at higher income tax rates.
In my opinion, it makes little difference between holding them in a 401k or an IRA. Dividends (yield) accumulates tax-free in both these tax-advantaged accounts.
Best wishes.
Taylor
Should I just wait until next year when I have another 17.5K room in my 401k and 11K in Roths (me and wife)?
just thinking
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- Taylor Larimore
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Adding an international bond fund?
xram:
Personally, I would not bother with a taxable international bond fund unless I could put it within a tax-advantaged account. Even then, I would only add it to a large portfolio where it would be at least 20% of the bond allocation.
Strive for simplicity -- not complexity.
Best wishes.
Taylor
Personally, I would not bother with a taxable international bond fund unless I could put it within a tax-advantaged account. Even then, I would only add it to a large portfolio where it would be at least 20% of the bond allocation.
Strive for simplicity -- not complexity.
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
Re: VG Total International Bond Fund is open
Have you seen the blog post by tfb on absolute vs. relative tax efficiency? Tax Efficiency: Relative or Absolute?xram wrote: This is my situation. I do not have any more "room" in 401k or Roth IRAs right now for Vanguard's International Bond Fund but would like to add it to my portfolio.
Should I just wait until next year when I have another 17.5K room in my 401k and 11K in Roths (me and wife)?
just thinking
Bottom line: at today's low rates, it could be better to hold stocks in tax-advantaged accounts and fixed income in taxable accounts. Worst case, it simply doesn't make that much difference now.
Low rates are also a reason to favor decent, non-brokered CDs over any bond fund. I am not adding any of the new international bond fund to my portfolio for this reason.
Kevin
If I make a calculation error, #Cruncher probably will let me know.