How Many Bonds Funds? (Currently Have 4)

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
MatthewNYC
Posts: 6
Joined: Sat Jun 15, 2019 2:02 pm

How Many Bonds Funds? (Currently Have 4)

Post by MatthewNYC » Wed Sep 11, 2019 12:50 pm

Hi,

My investment advisor (who I fired) has me in the following 4 bond ETFs at the following percentages for my bond allocation:

AGG ------- iShares Barclays Aggregate Bond Fund ------- 71.25%
FLRN ------- SPDR S TR/BLOOMBERG BARCLAYS ------- 8.50%
ISTB ------- ISHARES TR/CORE 1-5 YR USD BD ------- 11.24%
SPIB ------- SPDR S TR/BLOOMBERG BARCLAYS ------- 9.00%

I am wondering if owning the ETFs other than AGG add any value to the bond allocation?

For example, what benefit does owning FLRN, ISTB, and SPIB provide me?

What bond ETF should I be in to get general coverage for bonds (and how many bond ETFs do I need?)

I am looking forward to your insights!

Matthew

User avatar
vineviz
Posts: 5054
Joined: Tue May 15, 2018 1:55 pm

Re: How Many Bonds Funds? (Currently Have 4)

Post by vineviz » Wed Sep 11, 2019 12:58 pm

MatthewNYC wrote:
Wed Sep 11, 2019 12:50 pm
Hi,

My investment advisor (who I fired) has me in the following 4 bond ETFs at the following percentages for my bond allocation:

AGG ------- iShares Barclays Aggregate Bond Fund ------- 71.25%
FLRN ------- SPDR S TR/BLOOMBERG BARCLAYS ------- 8.50%
ISTB ------- ISHARES TR/CORE 1-5 YR USD BD ------- 11.24%
SPIB ------- SPDR S TR/BLOOMBERG BARCLAYS ------- 9.00%

I am wondering if owning the ETFs other than AGG add any value to the bond allocation?

For example, what benefit does owning FLRN, ISTB, and SPIB provide me?

What bond ETF should I be in to get general coverage for bonds (and how many bond ETFs do I need?)

I am looking forward to your insights!

Matthew
What's the goal for the investment and how long until you need to spend the money?

Also, please fill us in on the rest of the portfolio (with holdings and percentages). It's never appropriate to evaluate the bond holdings in isolation, without considering the rest of the portfolio.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

deikel
Posts: 774
Joined: Sat Jan 25, 2014 7:13 pm

Re: How Many Bonds Funds? (Currently Have 4)

Post by deikel » Wed Sep 11, 2019 1:39 pm

How much money in absolute dollars are we talking about here ? Just to gauge if it makes any sense trying to optimize this at all

The 1-5 yr Us core bonds I could understand as an attempt to shift the bond portfolio to short term bonds. After all and not too long ago the ideas was that bond rates could not possibly fall any lower, so short term was the way to go in order to buy into better rate bonds once the bottom was reached....

...of course, what happened was that the rates went lower and the bond prices increased....who did that see coming...

The other usual wisdom is to stay away from corporate bonds and rather take the risk on the stock side of the portfolio and not try to squeeze out a percent or two on the bond side since you all of a sudden take on more risk then you might have been aware of. I am not sure how your four funds behave in that regard...

ultimately, consolidate into one and make it easy
Everything you read in this post is my personal opinion. If you disagree with this disclaimer, please un-read the text immediately and destroy any copy or remembrance of it.

dbr
Posts: 30079
Joined: Sun Mar 04, 2007 9:50 am

Re: How Many Bonds Funds? (Currently Have 4)

Post by dbr » Wed Sep 11, 2019 2:14 pm

The comment regarding the whole situation and what specifically this investment in bonds is intended to do is appropriate.

That said, for the long term investor in stocks and bonds an obvious starting point is total US bond market, BND, and changing or adding to that requires a good and well understood reason. But there are lots of choices in bonds, most of which don't make much difference. Some alternatives might matter given more information about what one wants to do.

Jack FFR1846
Posts: 9887
Joined: Tue Dec 31, 2013 7:05 am

Re: How Many Bonds Funds? (Currently Have 4)

Post by Jack FFR1846 » Wed Sep 11, 2019 2:18 pm

I have one plus US Savings Bonds.
Bogle: Smart Beta is stupid

User avatar
Phineas J. Whoopee
Posts: 8566
Joined: Sun Dec 18, 2011 6:18 pm

Re: How Many Bonds Funds? (Currently Have 4)

Post by Phineas J. Whoopee » Wed Sep 11, 2019 5:12 pm

OP: Here's the preferred format for asking portfolio questions. If you use it you'll get much more informed and useful replies.
PJW

bearcub
Posts: 1001
Joined: Sat Mar 08, 2008 7:54 am
Location: Twilight Zone

Re: How Many Bonds Funds? (Currently Have 4)

Post by bearcub » Wed Sep 11, 2019 5:17 pm

Retired with both of Vanguard"s TIPS Funds. Their are other types of bonds in my two Balanced Funds. I try to keep it simple.

User avatar
jakehefty17
Posts: 145
Joined: Fri May 11, 2018 6:48 pm
Location: New York

Re: How Many Bonds Funds? (Currently Have 4)

Post by jakehefty17 » Thu Sep 12, 2019 11:33 am

Without delving into your personal scenario, I'll provide some input.

I have two held in my 401k:
Blackrock US Debt Index Fund - Tracks Barclays US Aggregate Bond Index (ER 0.04%)
Vanguard Total International Bond Index Fund - Tracks Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged) (ER 0.07%)

A single Total Bond Index Fund would suffice.
If you want international exposure, I'd recommend a USD hedged fund (this is highly debated, but I've decided I will hold international bonds).
Keep expenses as low as possible.
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." -Charles Bukowski

livesoft
Posts: 67740
Joined: Thu Mar 01, 2007 8:00 pm

Re: How Many Bonds Funds? (Currently Have 4)

Post by livesoft » Thu Sep 12, 2019 11:39 am

4 bond funds could be because you have 4 different accounts with different goals and/or different tax situations. For instance, a taxable account and a tax-deferred account. Maybe you have a shemenort-term goal for an apartment down payment. Maybe you have a long-term goal of retirement.

Another reason could be that the advisor could always point out at least one bond fund that did better than the others in order to look smart.
Wiki This signature message sponsored by sscritic: Learn to fish.

Post Reply