TVKNSC wrote:I know this gets off-topic, but Is is too early to worry about the rise of interest rates impacting bond funds? Or shouldnt that be much of a concern given we dont know when they will spike and by how much?
You should be concerned about the risk in your total portfolio, not the risk of any one fund. Bond funds are always subject to the risk that rates will rise, and stock funds are always subject to the (much greater) risk that the stock market will drop. The risk of your portfolio depends on how much you have in bonds and stocks, and which bonds and stocks. This is a risk for the bond portion of Wellington, which has a fairly long duration (six years), and a slightly lesser risk for the F fund or Total Bond Market (five years).
And that is why I recommend the G fund, which has a duration of one day. Unlike other bond funds, it won't lose value when rates rise; therefore, you need less of the G fund than of the F fund or the bond portion of Wellington to get the same risk reduction.
If you do like Wellington, it can be held in your IRA, where you will not lose 1% a year to taxes (compared to about 0.3% for Total Stock Market or Total International).