Total Bond vs Intermediate Bond

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bertilak
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Total Bond vs Intermediate Bond

Post by bertilak »

I just did a little tax-loss harvesting and am considering how to proceed next.

What I did: Sold Total Bond Market (VBTLX) and bought Intermediate Bond Market (VBILX).

What I am considering: Stay with VBILX. In other words, don't by back VBTLX.

Question: What are the considerations for and against VBTLX vs VBILX?
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mega317
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Re: Total Bond vs Intermediate Bond

Post by mega317 »

There are many many prior threads on this one. I believe the main difference is total bond has mortgage-backed, while intermediate bond has more corporates and is overall a little riskier. IMO they are similar enough to be identical. Who knows which will do better over any given time period?
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dratkinson
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Re: Total Bond vs Intermediate Bond

Post by dratkinson »

As MBS are deprecated (down-side risk, no corresponding high-side benefit), VBIIX/VBILX was what I was considering as a TBM substitute. (Before I decided to use munis in taxable.)

See: https://www.bogleheads.org/wiki/Mortgag ... d_security
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bertilak
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Re: Total Bond vs Intermediate Bond

Post by bertilak »

Thanks all.

Sorry for not doing a search. I see now there is a lot of info on this.

Before I even posted I did look at Mornngstar charts and saw:
  • VBILX is a bit more volatile than VBTLX, BUT ...
  • That tiny difference is swamped In comparison to Total Stock Market.
Conclusion: The above difference is not a factor in my decision as my 50/50 AA is a pretty loose risk/reward target anyway; such a tiny bit more risk is well within my fuzzy bullseye.

I'll look a bit deeper into the MBS factor but chances are, now that I've harvested my tax loss, I will sit tight.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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bertilak
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Re: Total Bond vs Intermediate Bond

Post by bertilak »

dratkinson wrote: Fri Feb 23, 2018 1:02 pm As MBS are deprecated (down-side risk, no corresponding high-side benefit), VBIIX/VBILX was what I was considering as a TBM substitute. (Before I decided to use munis in taxable.)

See: https://www.bogleheads.org/wiki/Mortgag ... d_security
I also looked at Munis, in the guise of Vanguard's Intermediate-Term Tax-Exempt Bond Fund (VWIUX). At my tax bracket, Its SEC yield of 2.30% compared to VBILX's 3.12% does not come close to breaking even.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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