VWLUX and VWIUX [Long and Intermediate tax-exempt]

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Topic Author
yoyo6713
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Joined: Thu May 10, 2018 8:48 pm

VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Wed Mar 11, 2020 12:04 am

Noticed both are down 10 cents today which is a lot. As the rate dropped in the past week or so these two didn't go up as much like other bond funds so I am a bit surprised by the steep drop today. I hold both and thought there is only interest rate risk and some small credit risk but I don't understand this kind of volatility.

Can someone explain what's behind it? Folks selling to buy equities? People moving into money market for better safety as some municipals could be facing defaults?

Thanks.

beehivehave
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Joined: Thu Aug 08, 2019 1:21 pm

Re: VWLUX and VWIUX

Post by beehivehave » Wed Mar 11, 2020 12:17 am

Stocks way up, money going there (at least for the day), so most bond funds of all types lost.
Also, existing government and corporate debt is high, so that may exacerbate losses.

finite_difference
Posts: 1665
Joined: Thu Jul 09, 2015 7:00 pm

Re: VWLUX and VWIUX

Post by finite_difference » Wed Mar 11, 2020 12:28 am

yoyo6713 wrote:
Wed Mar 11, 2020 12:04 am
Noticed both are down 10 cents today which is a lot. As the rate dropped in the past week or so these two didn't go up as much like other bond funds so I am a bit surprised by the steep drop today. I hold both and thought there is only interest rate risk and some small credit risk but I don't understand this kind of volatility.

Can someone explain what's behind it? Folks selling to buy equities? People moving into money market for better safety as some municipals could be facing defaults?

Thanks.
I think you’re probably right it’s some combination of the above.

VWIUX fell 0.67% Tuesday but gained 0.3% Monday and the YTD return is ~ 2.7% after 3 months?

Are you unhappy with the performance of VWIUX recently? Or for the past year, 3 years, 5 years or 10 years? If so, I’m not sure what would make you happy for a bond fund. Maybe a stable value fund or money market fund is better if you don’t like drops. But considering the returns I don’t mind a little volatility.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX

Post by yoyo6713 » Wed Mar 11, 2020 6:37 am

finite_difference wrote:
Wed Mar 11, 2020 12:28 am
yoyo6713 wrote:
Wed Mar 11, 2020 12:04 am
Noticed both are down 10 cents today which is a lot. As the rate dropped in the past week or so these two didn't go up as much like other bond funds so I am a bit surprised by the steep drop today. I hold both and thought there is only interest rate risk and some small credit risk but I don't understand this kind of volatility.

Can someone explain what's behind it? Folks selling to buy equities? People moving into money market for better safety as some municipals could be facing defaults?

Thanks.
I think you’re probably right it’s some combination of the above.

VWIUX fell 0.67% Tuesday but gained 0.3% Monday and the YTD return is ~ 2.7% after 3 months?

Are you unhappy with the performance of VWIUX recently? Or for the past year, 3 years, 5 years or 10 years? If so, I’m not sure what would make you happy for a bond fund. Maybe a stable value fund or money market fund is better if you don’t like drops. But considering the returns I don’t mind a little volatility.
Hard to say I am unhappy as compared with equity they are as expected doing better. I just don't like surprises as my majority holdings are these two and I have been holding VWIUX for a year and VWLUX for 5 weeks and both are still in green. With jitters like these (VWLUX dropped more than it went up for the past couple of days) I wonder if the bond bubble is about to burst. Maybe today they will gain some loss back...

Topic Author
yoyo6713
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Re: VWLUX and VWIUX

Post by yoyo6713 » Wed Mar 11, 2020 11:03 am

today equity is down but yield is up so I expect to see a bit more loss on both VWLUX and VWIUX.

Topic Author
yoyo6713
Posts: 121
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Re: VWLUX and VWIUX

Post by yoyo6713 » Wed Mar 11, 2020 5:12 pm

well well, dropped 18 cents and 19 cents each which represents 1.47% and 1.29%, way more than what I expected. Just saying...

UpperNwGuy
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Re: VWLUX and VWIUX

Post by UpperNwGuy » Wed Mar 11, 2020 5:50 pm

yoyo6713 wrote:
Wed Mar 11, 2020 5:12 pm
well well, dropped 18 cents and 19 cents each which represents 1.47% and 1.29%, way more than what I expected. Just saying...
Why are you agonizing over day to day changes in a bond fund? I think you need to read up on how bond investing works.

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX

Post by yoyo6713 » Wed Mar 11, 2020 6:24 pm

UpperNwGuy wrote:
Wed Mar 11, 2020 5:50 pm
yoyo6713 wrote:
Wed Mar 11, 2020 5:12 pm
well well, dropped 18 cents and 19 cents each which represents 1.47% and 1.29%, way more than what I expected. Just saying...
Why are you agonizing over day to day changes in a bond fund? I think you need to read up on how bond investing works.
You meant things like durations and the stuff and if you hold to maturity then everything will be fine?
I just think it is not normal for muni prices to drop like this. These are not corporate bonds, right? I have not checked similar drops has happened historically. I am curious at what point other bond holders start to think it is not normal...

What I need is to re-assess my bond appetite. I have 40% in these munis.

P.S. I just checked. Last time similar things happened was Oct 2008 and at that time interest rate was over 6%.

finite_difference
Posts: 1665
Joined: Thu Jul 09, 2015 7:00 pm

Re: VWLUX and VWIUX

Post by finite_difference » Thu Mar 12, 2020 1:38 am

yoyo6713 wrote:
Wed Mar 11, 2020 6:24 pm
UpperNwGuy wrote:
Wed Mar 11, 2020 5:50 pm
yoyo6713 wrote:
Wed Mar 11, 2020 5:12 pm
well well, dropped 18 cents and 19 cents each which represents 1.47% and 1.29%, way more than what I expected. Just saying...
Why are you agonizing over day to day changes in a bond fund? I think you need to read up on how bond investing works.
You meant things like durations and the stuff and if you hold to maturity then everything will be fine?
I just think it is not normal for muni prices to drop like this. These are not corporate bonds, right? I have not checked similar drops has happened historically. I am curious at what point other bond holders start to think it is not normal...

What I need is to re-assess my bond appetite. I have 40% in these munis.

P.S. I just checked. Last time similar things happened was Oct 2008 and at that time interest rate was over 6%.
Well, I also think it’s not normal for high-quality bond funds to have returns of like 4% real.

If a bond fund returns 0% real over 1-3 year time frames, I’m happy. I’d be even ok with slightly below that. But if it’s returning negative real rates over multi-year periods, then I would be a bit disappointed.

Do you have access to any stable value funds, like TIAA Traditional or TSP G or otherwise? You could also look at VMMXX (Vanguard Prime Money Market.) Could have a little in there for an EF.

Bonds can be volatile when the market is going crazy but high quality bonds are much less volatile than stocks and tend to recover losses quite quickly.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

kmft
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Joined: Tue Jan 28, 2020 1:17 pm

Re: VWLUX and VWIUX

Post by kmft » Thu Mar 12, 2020 1:35 pm

VWIUX down 6% right now. Might be a buying opportunity...

Pawpatrol
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Re: VWLUX and VWIUX

Post by Pawpatrol » Thu Mar 12, 2020 1:39 pm

kmft wrote:
Thu Mar 12, 2020 1:35 pm
VWIUX down 6% right now. Might be a buying opportunity...
How do you figure out what the sec yield is if it dropped 6%

annu
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Re: VWLUX and VWIUX

Post by annu » Thu Mar 12, 2020 1:42 pm

I see it down to 14.59 compared to high of 14.88, how is that 6 %?

Pawpatrol
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Re: VWLUX and VWIUX

Post by Pawpatrol » Thu Mar 12, 2020 1:44 pm

annu wrote:
Thu Mar 12, 2020 1:42 pm
I see it down to 14.59 compared to high of 14.88, how is that 6 %?
It wont change until market closes and nav is adjusted

Pawpatrol
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Joined: Sun Sep 24, 2017 5:21 pm

Re: VWLUX and VWIUX

Post by Pawpatrol » Thu Mar 12, 2020 1:44 pm

Pawpatrol wrote:
Thu Mar 12, 2020 1:44 pm
annu wrote:
Thu Mar 12, 2020 1:42 pm
I see it down to 14.59 compared to high of 14.88, how is that 6 %?
It wont change until market closes and nav is adjusted
Vteb is similar enough and down over 6%

kmft
Posts: 22
Joined: Tue Jan 28, 2020 1:17 pm

Re: VWLUX and VWIUX

Post by kmft » Thu Mar 12, 2020 1:53 pm

Pawpatrol wrote:
Thu Mar 12, 2020 1:44 pm
Pawpatrol wrote:
Thu Mar 12, 2020 1:44 pm
annu wrote:
Thu Mar 12, 2020 1:42 pm
I see it down to 14.59 compared to high of 14.88, how is that 6 %?
It wont change until market closes and nav is adjusted
Vteb is similar enough and down over 6%
That’s correct, VTEB tracks very closely.

annu
Posts: 411
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Re: VWLUX and VWIUX

Post by annu » Thu Mar 12, 2020 2:06 pm

I have been wrong before, but they do look different
Vteb vwiux
As-of date 01/31/2020 01/31/2020 — — —
Number of bonds 4414 9615 — — —
Average maturity 13.5 years 8.8 years — — —
Average duration 5.2 years 4.6 years — — —
Average coupon 4.7% 4.4%

Maybe vwlux will track better with it?

hudson
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Joined: Fri Apr 06, 2007 9:15 am

Re: VWLUX and VWIUX

Post by hudson » Thu Mar 12, 2020 2:38 pm

VTEB and VTEAX are joined at the hip.

https://investor.vanguard.com/mutual-fu ... file/vteax

kmft
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Joined: Tue Jan 28, 2020 1:17 pm

Re: VWLUX and VWIUX

Post by kmft » Thu Mar 12, 2020 2:40 pm

annu wrote:
Thu Mar 12, 2020 2:06 pm
I have been wrong before, but they do look different
Vteb vwiux
As-of date 01/31/2020 01/31/2020 — — —
Number of bonds 4414 9615 — — —
Average maturity 13.5 years 8.8 years — — —
Average duration 5.2 years 4.6 years — — —
Average coupon 4.7% 4.4%

Maybe vwlux will track better with it?
There are difference as you’ve pointed out, but they’ve still have tracked VERY closely over the past 5 years.
https://www.portfoliovisualizer.com/bac ... ion2_2=100

drk
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Location: Seattle

Re: VWLUX and VWIUX

Post by drk » Thu Mar 12, 2020 2:47 pm

Pawpatrol wrote:
Thu Mar 12, 2020 1:44 pm
Pawpatrol wrote:
Thu Mar 12, 2020 1:44 pm
annu wrote:
Thu Mar 12, 2020 1:42 pm
I see it down to 14.59 compared to high of 14.88, how is that 6 %?
It wont change until market closes and nav is adjusted
Vteb is similar enough and down over 6%
FWIW, the intraday NAV isn't down as much, so we'll see how much of that loss sticks.

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX

Post by yoyo6713 » Thu Mar 12, 2020 5:11 pm

finite_difference wrote:
Thu Mar 12, 2020 1:38 am
yoyo6713 wrote:
Wed Mar 11, 2020 6:24 pm
UpperNwGuy wrote:
Wed Mar 11, 2020 5:50 pm
yoyo6713 wrote:
Wed Mar 11, 2020 5:12 pm
well well, dropped 18 cents and 19 cents each which represents 1.47% and 1.29%, way more than what I expected. Just saying...
Why are you agonizing over day to day changes in a bond fund? I think you need to read up on how bond investing works.
You meant things like durations and the stuff and if you hold to maturity then everything will be fine?
I just think it is not normal for muni prices to drop like this. These are not corporate bonds, right? I have not checked similar drops has happened historically. I am curious at what point other bond holders start to think it is not normal...

What I need is to re-assess my bond appetite. I have 40% in these munis.

P.S. I just checked. Last time similar things happened was Oct 2008 and at that time interest rate was over 6%.
Well, I also think it’s not normal for high-quality bond funds to have returns of like 4% real.

If a bond fund returns 0% real over 1-3 year time frames, I’m happy. I’d be even ok with slightly below that. But if it’s returning negative real rates over multi-year periods, then I would be a bit disappointed.

Do you have access to any stable value funds, like TIAA Traditional or TSP G or otherwise? You could also look at VMMXX (Vanguard Prime Money Market.) Could have a little in there for an EF.

Bonds can be volatile when the market is going crazy but high quality bonds are much less volatile than stocks and tend to recover losses quite quickly.
Thanks. I swithced to VMSXX while I digest the situation and my appetite.

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX

Post by yoyo6713 » Thu Mar 12, 2020 5:25 pm

Just checked:

VWLUX: down 36 cents or 2.99%
VWIUX: down 35 cents or 2.40%

folks own these are expecting this kind of losses when initially decided the allocations?

kmft
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Joined: Tue Jan 28, 2020 1:17 pm

Re: VWLUX and VWIUX

Post by kmft » Thu Mar 12, 2020 6:01 pm

yoyo6713 wrote:
Thu Mar 12, 2020 5:25 pm
Just checked:

VWLUX: down 36 cents or 2.99%
VWIUX: down 35 cents or 2.40%

folks own these are expecting this kind of losses when initially decided the allocations?
That's much better than I thought it was going to be at the end of the day. Was tracking via ETEB (ETF) and it was down 6%, but turns out it was a liquidity issue. Yeah, I think 2.4% is pretty "normal" during a crash like today. Just go back and look at how some bond funds behaved in 2008. A 6% drop for a 'stable' fund like VWIUX would be insane though.

drk
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Location: Seattle

Re: VWLUX and VWIUX

Post by drk » Thu Mar 12, 2020 6:18 pm

yoyo6713 wrote:
Thu Mar 12, 2020 5:25 pm
Just checked:

VWLUX: down 36 cents or 2.99%
VWIUX: down 35 cents or 2.40%

folks own these are expecting this kind of losses when initially decided the allocations?
Yes, absolutely, although I expected the cause to be rising interest rates. :oops:

hudson
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Joined: Fri Apr 06, 2007 9:15 am

Re: VWLUX and VWIUX

Post by hudson » Thu Mar 12, 2020 6:57 pm

yoyo6713 wrote:
Thu Mar 12, 2020 5:25 pm
Just checked:

VWLUX: down 36 cents or 2.99%
VWIUX: down 35 cents or 2.40%

folks own these are expecting this kind of losses when initially decided the allocations?
Baird's BMBIX which is the safest intermediate muni fund (I think) was down 23 cents or 1.94%.(Thurs. Mar 12th)
It holds almost 98% AAA/AA bonds and 47% of its bonds are prefunded.
Those holdings have an extremely low chance of defaulting.
I'm not saying to buy BMBIX. I'm asking how can such a solid fund with solid holdings drop like that?

My uneducated speculation is that the underlying bond holdings are being (panic) dumped, and there are more sellers than buyers. It's the reverse of empty shelves of toilet paper....more buyers than suppliers.
It seems like some bond funds did the same in 2008....and they quickly came back....I don't have any data to back that up.

annu
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Joined: Mon Nov 04, 2019 7:55 pm

Re: VWLUX and VWIUX

Post by annu » Fri Mar 13, 2020 12:13 am

Oh boy, it's down a lot more then 3 %......

hudson
Posts: 2397
Joined: Fri Apr 06, 2007 9:15 am

VWIUX DATA From Yahoo Finance 2008 and 2009

Post by hudson » Fri Mar 13, 2020 5:46 am

VWIUX Net Asset Value...NAV....2008 and 2009 (VWIUX = Vanguard Intermediate Muni)
2008
Jan 2 $12.71
Oct 7 $12.60
Oct 16 $12.11...down 49 cents from Oct. 7th
Nov 7 $12.71
Dec 15 $12.26
Dec 30 $12.67

2009
Mar 17 $12.83
Dec 30 $13.47

VWIUX 2020
Feb 6 $14.60
Mar 9 $14.88
Mar 10 $14.78
Mar 11 $14.59
Mar 12 $14.24 or down 36 cents from Feb 6th

Summary: VWIUX had large drops in 2008...but it came back.

Note: 2008 was when the stock market dropped 50%

Mrmetalpole
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Re: VWLUX and VWIUX

Post by Mrmetalpole » Fri Mar 13, 2020 6:07 am

Could be voluntary selling to raise cash in this environment, forced selling to raise cash and cover big losses/margin calls in other areas or selling in fear that muni bonds will be dropping more in recessionary environment.

finite_difference
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Re: VWLUX and VWIUX

Post by finite_difference » Sat Mar 14, 2020 8:34 am

The cause of the drop may be liquidity issues, so more sellers than buyers, which is as the OP points out unusual. But it can happen during market crises:

https://www.nytimes.com/2020/03/12/upsh ... virus.html

With the recent drops, YTD return of VWIUX is -0.96% nominal as of 3/13/2020. But the 1-year return is still something like 4.67% nominal, or 2.67% real if inflation is 2%.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX

Post by yoyo6713 » Sat Mar 14, 2020 9:03 am

I didn't own any munis in 2008 thus it didn't occur to me VWLUX and VWIUX can swing like this. I initially noticed when 10 year bonds yield dropped to under 0.5%, 20 year ETF (TLT, I don't own any) went up like there is no tomorrow but VWLUX/VWIUX moved up only modestly. After my initial post, I figured I need to re-assess and I avoided the final 3% drop. Vanguard won't let me get back in for 30 days so have enough time to think it over.

hudson
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Joined: Fri Apr 06, 2007 9:15 am

Re: VWLUX and VWIUX

Post by hudson » Sat Mar 14, 2020 10:03 am

yoyo6713 wrote:
Sat Mar 14, 2020 9:03 am
I didn't own any munis in 2008 thus it didn't occur to me VWLUX and VWIUX can swing like this. I initially noticed when 10 year bonds yield dropped to under 0.5%, 20 year ETF (TLT, I don't own any) went up like there is no tomorrow but VWLUX/VWIUX moved up only modestly. After my initial post, I figured I need to re-assess and I avoided the final 3% drop. Vanguard won't let me get back in for 30 days so have enough time to think it over.
I feel your pain!
In 2008...only with bond holdings, I did not sell; I held onto Vanguard's Inflation Protect Fund even when it was dropping unexpectedly. I kept it because the holdings....treasuries were safe. It came back. It turns out the drop was caused (I think) by a very large company that was selling to get cash to survive. When it dropped, others sold because it was going down.
Don't think that I was a brave soldier. I bailed on equities.

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX

Post by yoyo6713 » Tue Mar 17, 2020 7:11 pm

Again dropped 0.06 (0.51%) and 0.08 (0.56%) today.

JustSomeGuy155
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Re: VWLUX and VWIUX

Post by JustSomeGuy155 » Tue Mar 17, 2020 8:51 pm

yoyo6713, I own muni bonds that are dropping too. But I also own equities and I'm much more worried about them!

Do you own equities? If you compare the performance between bonds and equities over the last month or year, hopefully that gives you some solace.

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX

Post by yoyo6713 » Tue Mar 17, 2020 10:04 pm

JustSomeGuy155 wrote:
Tue Mar 17, 2020 8:51 pm
yoyo6713, I own muni bonds that are dropping too. But I also own equities and I'm much more worried about them!

Do you own equities? If you compare the performance between bonds and equities over the last month or year, hopefully that gives you some solace.
I do own equities but my bond positions were so much bigger because I am close to retirement age. I sold all bond positions on the day I posted this because I figured the price drop were due to demand/supply inbalance and it could potentially get worse. My re-entry date (for now) is April 10th but I might average munis in earlier from Fidelity (vanguard doesn't allow buy back until 30 days later). Hopefully the market is stablized by then. I hate to learn lessons on the fly.

annu
Posts: 411
Joined: Mon Nov 04, 2019 7:55 pm

Re: VWLUX and VWIUX

Post by annu » Tue Mar 17, 2020 11:36 pm

yoyo6713 wrote:
Tue Mar 17, 2020 10:04 pm
JustSomeGuy155 wrote:
Tue Mar 17, 2020 8:51 pm
yoyo6713, I own muni bonds that are dropping too. But I also own equities and I'm much more worried about them!

Do you own equities? If you compare the performance between bonds and equities over the last month or year, hopefully that gives you some solace.
I do own equities but my bond positions were so much bigger because I am close to retirement age. I sold all bond positions on the day I posted this because I figured the price drop were due to demand/supply inbalance and it could potentially get worse. My re-entry date (for now) is April 10th but I might average munis in earlier from Fidelity (vanguard doesn't allow buy back until 30 days later). Hopefully the market is stablized by then. I hate to learn lessons on the fly.
So you sold all your vwiux and vwlux? I hold both as well, but probably not as big as you being close to retirement and all. But they only are doing like 4/5% down so far. You exoectbthey will go down even more and dont come back up?

annu
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Joined: Mon Nov 04, 2019 7:55 pm

Re: VWLUX and VWIUX

Post by annu » Wed Mar 18, 2020 1:17 am

Will all the stimulus money being invested into bonds help?

drk
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Location: Seattle

Re: VWLUX and VWIUX

Post by drk » Wed Mar 18, 2020 1:21 am

annu wrote:
Wed Mar 18, 2020 1:17 am
Will all the stimulus money being invested into bonds help?
There's talk of the Fed starting to buy muni bonds. That would certainly help them.

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX

Post by yoyo6713 » Wed Mar 18, 2020 5:49 am

annu wrote:
Tue Mar 17, 2020 11:36 pm
yoyo6713 wrote:
Tue Mar 17, 2020 10:04 pm
JustSomeGuy155 wrote:
Tue Mar 17, 2020 8:51 pm
yoyo6713, I own muni bonds that are dropping too. But I also own equities and I'm much more worried about them!

Do you own equities? If you compare the performance between bonds and equities over the last month or year, hopefully that gives you some solace.
I do own equities but my bond positions were so much bigger because I am close to retirement age. I sold all bond positions on the day I posted this because I figured the price drop were due to demand/supply inbalance and it could potentially get worse. My re-entry date (for now) is April 10th but I might average munis in earlier from Fidelity (vanguard doesn't allow buy back until 30 days later). Hopefully the market is stablized by then. I hate to learn lessons on the fly.
So you sold all your vwiux and vwlux? I hold both as well, but probably not as big as you being close to retirement and all. But they only are doing like 4/5% down so far. You exoectbthey will go down even more and dont come back up?
I am sure it will come back and will likely come back before we expect but for the time being I am not interested in uncertainity. I can only speak for myself as I don't need the income from these bonds. If something worse happens in the bond market (very unlikely, mind you), I would rather watch it unfold from the sideline. Having said that I do want to get back in so I will re-evaluate my dates frequently.

hudson
Posts: 2397
Joined: Fri Apr 06, 2007 9:15 am

VWIUX Historical Price Perspective...the last 18 months

Post by hudson » Wed Mar 18, 2020 6:14 am

$13.67 10/15/2018 I bought VWIUX after doing a tax loss harvest....long term holder
$14.07 03/19/2019 52-week low...that was LAST MARCH
$14.14 03/18/2020 Recent low
$14.88 03/09/2019 52-week high

VWIUX prices are in the normal range. Prices above are over the last 18 months.
I'm still to the good after re-buying in Oct. 2018 after a tax loss harvest.
I'm sure that the recent 74 cent drop is painful.

How solid is VWIUX under the hood? Maybe look at VWIUX's portfolio tab: https://investor.vanguard.com/mutual-fu ... olio/vwiux

In the bond style box, it's above investment grade.
It's 91.2% AAA/AA/A bonds
The duration is intermediate 4.6 years.
It's the largest muni bond fund, and it's managed by a non-profit organization.
The distribution yield keeps paying out; because of the price decline, the distribution yield will hopefully rise.

If you want a safer muni bond fund, look at Baird's BMBIX...it's NAV also fell....not as much.
Otherwise your choices are treasuries or CDs....at least for intermediate term fixed income.

If you are in these tax brackets, it's hard to get a better after tax payout than VWIUX (For a national muni fund):
22%, 24%, 32%, 35%, 37%...but don't listen to me, do the math.

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWIUX Historical Price Perspective...the last 18 months

Post by yoyo6713 » Wed Mar 18, 2020 7:42 am

hudson wrote:
Wed Mar 18, 2020 6:14 am
$13.67 10/15/2018 I bought VWIUX after doing a tax loss harvest....long term holder
$14.07 03/19/2019 52-week low...that was LAST MARCH
$14.14 03/18/2020 Recent low
$14.88 03/09/2019 52-week high

VWIUX prices are in the normal range. Prices above are over the last 18 months.
I'm still to the good after re-buying in Oct. 2018 after a tax loss harvest.
I'm sure that the recent 74 cent drop is painful.

How solid is VWIUX under the hood? Maybe look at VWIUX's portfolio tab: https://investor.vanguard.com/mutual-fu ... olio/vwiux

In the bond style box, it's above investment grade.
It's 91.2% AAA/AA/A bonds
The duration is intermediate 4.6 years.
It's the largest muni bond fund, and it's managed by a non-profit organization.
The distribution yield keeps paying out; because of the price decline, the distribution yield will hopefully rise.

If you want a safer muni bond fund, look at Baird's BMBIX...it's NAV also fell....not as much.
Otherwise your choices are treasuries or CDs....at least for intermediate term fixed income.

If you are in these tax brackets, it's hard to get a better after tax payout than VWIUX (For a national muni fund):
22%, 24%, 32%, 35%, 37%...but don't listen to me, do the math.
I am listening :happy

If you hold to maturity then you have nothing to worry about, unless some of the underlying bonds goes default. Chances are very very small. If you ever plan to sell (for an example, rebalance) then you might lose money due to liqulity issues (like it is now, the market showed you can easily lose 3% overnight). For the time being, Ally 1.75% no penalty CD sounds better/safer.

P.S. Ally actually dropped it to 1.55% overnight.

hudson
Posts: 2397
Joined: Fri Apr 06, 2007 9:15 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by hudson » Wed Mar 18, 2020 7:50 am

Yoyo6713,
I have no problem with anyone making a move like yours....a move to a safer choice.
You have to look at your situation and take action as necessary.

You probably already know that funds don't hold bonds to maturity; they have to constantly buy and sell to continue to be an intermediate bond fund...so the turnover is around 20% a year....according to Schwab...15%.

In 2008, with retirement looming, I bailed on equities and never went back. I held on to my fixed income which also dropped....but not as much as stocks. I think the situation here is the same as 2008. Munis aren't down that much and they will come back, because the underlying holdings are solid.

I think decisions should be based on the best available information....thank you Bogleheads!
Last edited by hudson on Wed Mar 18, 2020 2:55 pm, edited 1 time in total.

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Wed Mar 18, 2020 1:17 pm

By looking at VTEB, maybe VWIUX will lose another 3+% today unless things improve in the next 2 hrs. I think I will wait until the volatility subsides before buy back in. At least 1 month where daily up and down is under 0.3%

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Wed Mar 18, 2020 5:13 pm

there seemed to be a big discrepancy between VTED and VWLUX and VWIUX:

VTED down -2.99 (5.85%)
VWLUX down -0.12 (1.03%)
VWIUX down -0.14 (0.99%)

So I was wrong to say VWLUX and VWIUX would go down by 3%+ at EOD.

TNOA
Posts: 154
Joined: Fri May 24, 2019 6:08 am

Re: VWLUX and VWIUX

Post by TNOA » Wed Mar 18, 2020 6:24 pm

yoyo6713 wrote:
Tue Mar 17, 2020 10:04 pm
JustSomeGuy155 wrote:
Tue Mar 17, 2020 8:51 pm
yoyo6713, I own muni bonds that are dropping too. But I also own equities and I'm much more worried about them!

Do you own equities? If you compare the performance between bonds and equities over the last month or year, hopefully that gives you some solace.
I do own equities but my bond positions were so much bigger because I am close to retirement age. I sold all bond positions on the day I posted this because I figured the price drop were due to demand/supply inbalance and it could potentially get worse. My re-entry date (for now) is April 10th but I might average munis in earlier from Fidelity (vanguard doesn't allow buy back until 30 days later). Hopefully the market is stablized by then. I hate to learn lessons on the fly.
I am in retirement. And I wanted to comment on this, after reading all the blogs on this topic, I must say what a great group and wisdom everyone is exhibiting. Mine might not be of value, but it is my philosophy. My bonds are split 50/50 between VGIT/VTEB. I decided to invest in VTEB only after studying carefully the the 2008 price action. VTEB initially declined considerably then also but after the dust settled it caught up and performed as I expected throwing in the dividends (it took few years). One should think of these while crafting the AA. Once we are done and invested, I do not understand how we panic when an "unexpected" behavior shows up in any of our holds, assuming these are well-known diversified holds as many of the BHs here say they own (VTI VXUS VGIT VTEB, BIV, TLT, etc. or their funds equivalents). Once we are invested, we know that don't know what may happen the next second, next month, next decade. If we are investing with the concept that "- If this drops tomorrow more than I expected then I will immediately sell and wait a few days for the dust to settle then enter again". With everything I've learned from these forums over my investment life, I must say this thinking, to me, is unconscionable. I am certainly unpleasantly surprised with (my) VTEB's (recent twice) steep price actions. But if I wanted to be invested in munis, I would never come up with the thought let me get out today enter back over 30 days or next week. If you changed your idea not to invest in munis, that would have been an all together a different story, i.e., we all get tested with our AAs initially at times like these and I can comprehend better if you changed your mind and did not want munis in your portfolio all together because this was a lesson. That all being said, the last thing I'd like to imply is to judge. I am respectful this is how you felt comfortable and did what you did. I am merely adding my two cents as to how my process works. There may come a time (much lower levels than where we are today) that I get tested mentally myself perhaps and may end up doing the same thing you are currently going thru. Although, with what I know today, it is (yes, again) unconscionable. It is truly a pleasure to read, understand, observe what everyone is going thru at times like these. Truly testing but incredibly educational, wisdom-building times. Take it from a guy who is definitely losing a lot of his so-called wealth (paper losses, so far).

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX

Post by yoyo6713 » Wed Mar 18, 2020 10:58 pm

TNOA wrote:
Wed Mar 18, 2020 6:24 pm
yoyo6713 wrote:
Tue Mar 17, 2020 10:04 pm
JustSomeGuy155 wrote:
Tue Mar 17, 2020 8:51 pm
yoyo6713, I own muni bonds that are dropping too. But I also own equities and I'm much more worried about them!

Do you own equities? If you compare the performance between bonds and equities over the last month or year, hopefully that gives you some solace.
I do own equities but my bond positions were so much bigger because I am close to retirement age. I sold all bond positions on the day I posted this because I figured the price drop were due to demand/supply inbalance and it could potentially get worse. My re-entry date (for now) is April 10th but I might average munis in earlier from Fidelity (vanguard doesn't allow buy back until 30 days later). Hopefully the market is stablized by then. I hate to learn lessons on the fly.
I am in retirement. And I wanted to comment on this, after reading all the blogs on this topic, I must say what a great group and wisdom everyone is exhibiting. Mine might not be of value, but it is my philosophy. My bonds are split 50/50 between VGIT/VTEB. I decided to invest in VTEB only after studying carefully the the 2008 price action. VTEB initially declined considerably then also but after the dust settled it caught up and performed as I expected throwing in the dividends (it took few years). One should think of these while crafting the AA. Once we are done and invested, I do not understand how we panic when an "unexpected" behavior shows up in any of our holds, assuming these are well-known diversified holds as many of the BHs here say they own (VTI VXUS VGIT VTEB, BIV, TLT, etc. or their funds equivalents). Once we are invested, we know that don't know what may happen the next second, next month, next decade. If we are investing with the concept that "- If this drops tomorrow more than I expected then I will immediately sell and wait a few days for the dust to settle then enter again". With everything I've learned from these forums over my investment life, I must say this thinking, to me, is unconscionable. I am certainly unpleasantly surprised with (my) VTEB's (recent twice) steep price actions. But if I wanted to be invested in munis, I would never come up with the thought let me get out today enter back over 30 days or next week. If you changed your idea not to invest in munis, that would have been an all together a different story, i.e., we all get tested with our AAs initially at times like these and I can comprehend better if you changed your mind and did not want munis in your portfolio all together because this was a lesson. That all being said, the last thing I'd like to imply is to judge. I am respectful this is how you felt comfortable and did what you did. I am merely adding my two cents as to how my process works. There may come a time (much lower levels than where we are today) that I get tested mentally myself perhaps and may end up doing the same thing you are currently going thru. Although, with what I know today, it is (yes, again) unconscionable. It is truly a pleasure to read, understand, observe what everyone is going thru at times like these. Truly testing but incredibly educational, wisdom-building times. Take it from a guy who is definitely losing a lot of his so-called wealth (paper losses, so far).
Thanks for your wisdom. The difference is, I thought I know these munis but in reality I don't. I was not aware of their 2018 behavior. Maybe I should have studied a lot more before I bought them. Capital preservation is more important to me. I am certainly not panicing. Selling is easy, the most difficult part is to decide when or if you get back into the market.
I am OK leaving money on the table when the market turns. I am OK if I don't enter the market ever again or if all my investment earns 0% for the next 20 years (if inflation doesn't run wild).

hudson
Posts: 2397
Joined: Fri Apr 06, 2007 9:15 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by hudson » Thu Mar 19, 2020 12:20 pm

yoyo6713,
Did you read nisiprius's contribution in this discussion: viewtopic.php?p=5112172#p5112172

TNOA
Posts: 154
Joined: Fri May 24, 2019 6:08 am

Re: VWLUX and VWIUX

Post by TNOA » Thu Mar 19, 2020 4:05 pm

yoyo6713 wrote:
Wed Mar 18, 2020 10:58 pm
TNOA wrote:
Wed Mar 18, 2020 6:24 pm
yoyo6713 wrote:
Tue Mar 17, 2020 10:04 pm
JustSomeGuy155 wrote:
Tue Mar 17, 2020 8:51 pm
yoyo6713, I own muni bonds that are dropping too. But I also own equities and I'm much more worried about them!

Do you own equities? If you compare the performance between bonds and equities over the last month or year, hopefully that gives you some solace.
I do own equities but my bond positions were so much bigger because I am close to retirement age. I sold all bond positions on the day I posted this because I figured the price drop were due to demand/supply inbalance and it could potentially get worse. My re-entry date (for now) is April 10th but I might average munis in earlier from Fidelity (vanguard doesn't allow buy back until 30 days later). Hopefully the market is stablized by then. I hate to learn lessons on the fly.
I am in retirement. And I wanted to comment on this, after reading all the blogs on this topic, I must say what a great group and wisdom everyone is exhibiting. Mine might not be of value, but it is my philosophy. My bonds are split 50/50 between VGIT/VTEB. I decided to invest in VTEB only after studying carefully the the 2008 price action. VTEB initially declined considerably then also but after the dust settled it caught up and performed as I expected throwing in the dividends (it took few years). One should think of these while crafting the AA. Once we are done and invested, I do not understand how we panic when an "unexpected" behavior shows up in any of our holds, assuming these are well-known diversified holds as many of the BHs here say they own (VTI VXUS VGIT VTEB, BIV, TLT, etc. or their funds equivalents). Once we are invested, we know that don't know what may happen the next second, next month, next decade. If we are investing with the concept that "- If this drops tomorrow more than I expected then I will immediately sell and wait a few days for the dust to settle then enter again". With everything I've learned from these forums over my investment life, I must say this thinking, to me, is unconscionable. I am certainly unpleasantly surprised with (my) VTEB's (recent twice) steep price actions. But if I wanted to be invested in munis, I would never come up with the thought let me get out today enter back over 30 days or next week. If you changed your idea not to invest in munis, that would have been an all together a different story, i.e., we all get tested with our AAs initially at times like these and I can comprehend better if you changed your mind and did not want munis in your portfolio all together because this was a lesson. That all being said, the last thing I'd like to imply is to judge. I am respectful this is how you felt comfortable and did what you did. I am merely adding my two cents as to how my process works. There may come a time (much lower levels than where we are today) that I get tested mentally myself perhaps and may end up doing the same thing you are currently going thru. Although, with what I know today, it is (yes, again) unconscionable. It is truly a pleasure to read, understand, observe what everyone is going thru at times like these. Truly testing but incredibly educational, wisdom-building times. Take it from a guy who is definitely losing a lot of his so-called wealth (paper losses, so far).
Thanks for your wisdom. The difference is, I thought I know these munis but in reality I don't. I was not aware of their 2018 behavior. Maybe I should have studied a lot more before I bought them. Capital preservation is more important to me. I am certainly not panicing. Selling is easy, the most difficult part is to decide when or if you get back into the market.
I am OK leaving money on the table when the market turns. I am OK if I don't enter the market ever again or if all my investment earns 0% for the next 20 years (if inflation doesn't run wild).
This what you "- I am OK leaving money on the table when the market turns. I am OK if I don't enter the market ever again or if all my investment earns 0% for the next 20 years (if inflation doesn't run wild).", in my opinion, does not belong to someone with the constitution of an investor, but perhaps that of a short-term (or let's say event-driven) trader. I am glad we talked, it clarified to me, and hopefully helping clarifying for you whether you should be an investor in the stock market the way most BHs invest here (certainly not implying it's the only way or that it's the correct way of investing).

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Thu Mar 19, 2020 4:45 pm

hudson wrote:
Thu Mar 19, 2020 12:20 pm
yoyo6713,
Did you read nisiprius's contribution in this discussion: viewtopic.php?p=5112172#p5112172
I did thank you. I read every post related to bonds.

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX

Post by yoyo6713 » Thu Mar 19, 2020 5:04 pm

TNOA wrote:
Thu Mar 19, 2020 4:05 pm
yoyo6713 wrote:
Wed Mar 18, 2020 10:58 pm
TNOA wrote:
Wed Mar 18, 2020 6:24 pm
yoyo6713 wrote:
Tue Mar 17, 2020 10:04 pm
JustSomeGuy155 wrote:
Tue Mar 17, 2020 8:51 pm
yoyo6713, I own muni bonds that are dropping too. But I also own equities and I'm much more worried about them!

Do you own equities? If you compare the performance between bonds and equities over the last month or year, hopefully that gives you some solace.
I do own equities but my bond positions were so much bigger because I am close to retirement age. I sold all bond positions on the day I posted this because I figured the price drop were due to demand/supply inbalance and it could potentially get worse. My re-entry date (for now) is April 10th but I might average munis in earlier from Fidelity (vanguard doesn't allow buy back until 30 days later). Hopefully the market is stablized by then. I hate to learn lessons on the fly.
I am in retirement. And I wanted to comment on this, after reading all the blogs on this topic, I must say what a great group and wisdom everyone is exhibiting. Mine might not be of value, but it is my philosophy. My bonds are split 50/50 between VGIT/VTEB. I decided to invest in VTEB only after studying carefully the the 2008 price action. VTEB initially declined considerably then also but after the dust settled it caught up and performed as I expected throwing in the dividends (it took few years). One should think of these while crafting the AA. Once we are done and invested, I do not understand how we panic when an "unexpected" behavior shows up in any of our holds, assuming these are well-known diversified holds as many of the BHs here say they own (VTI VXUS VGIT VTEB, BIV, TLT, etc. or their funds equivalents). Once we are invested, we know that don't know what may happen the next second, next month, next decade. If we are investing with the concept that "- If this drops tomorrow more than I expected then I will immediately sell and wait a few days for the dust to settle then enter again". With everything I've learned from these forums over my investment life, I must say this thinking, to me, is unconscionable. I am certainly unpleasantly surprised with (my) VTEB's (recent twice) steep price actions. But if I wanted to be invested in munis, I would never come up with the thought let me get out today enter back over 30 days or next week. If you changed your idea not to invest in munis, that would have been an all together a different story, i.e., we all get tested with our AAs initially at times like these and I can comprehend better if you changed your mind and did not want munis in your portfolio all together because this was a lesson. That all being said, the last thing I'd like to imply is to judge. I am respectful this is how you felt comfortable and did what you did. I am merely adding my two cents as to how my process works. There may come a time (much lower levels than where we are today) that I get tested mentally myself perhaps and may end up doing the same thing you are currently going thru. Although, with what I know today, it is (yes, again) unconscionable. It is truly a pleasure to read, understand, observe what everyone is going thru at times like these. Truly testing but incredibly educational, wisdom-building times. Take it from a guy who is definitely losing a lot of his so-called wealth (paper losses, so far).
Thanks for your wisdom. The difference is, I thought I know these munis but in reality I don't. I was not aware of their 2018 behavior. Maybe I should have studied a lot more before I bought them. Capital preservation is more important to me. I am certainly not panicing. Selling is easy, the most difficult part is to decide when or if you get back into the market.
I am OK leaving money on the table when the market turns. I am OK if I don't enter the market ever again or if all my investment earns 0% for the next 20 years (if inflation doesn't run wild).
This what you "- I am OK leaving money on the table when the market turns. I am OK if I don't enter the market ever again or if all my investment earns 0% for the next 20 years (if inflation doesn't run wild).", in my opinion, does not belong to someone with the constitution of an investor, but perhaps that of a short-term (or let's say event-driven) trader. I am glad we talked, it clarified to me, and hopefully helping clarifying for you whether you should be an investor in the stock market the way most BHs invest here (certainly not implying it's the only way or that it's the correct way of investing).
You've got sharp eyes :-) Yes different style but I am not a trader. I technically already "won the game" thus the above statement. I joined before 2000 when one could buy i-bonds for cashback credit cards. I lost my original login.

JiggyWillis
Posts: 48
Joined: Sun Jan 14, 2018 1:17 am

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by JiggyWillis » Thu Mar 19, 2020 7:58 pm

I bought a slug of VWIUX in taxable in mid January and it is down over 6% counting today's 2.5% decline. I thought it would be more stable than this in a drawdown-certainly did not expect this type of volatility. I may use it to rebalance into Total Stock Market instead of using the money market funds I have been holding for that purpose.

Question: can I go under the $50k threshhold for VWIUX or will that trigger a problem?

Topic Author
yoyo6713
Posts: 121
Joined: Thu May 10, 2018 8:48 pm

Re: VWLUX and VWIUX [Long and Intermediate tax-exempt]

Post by yoyo6713 » Thu Mar 19, 2020 8:09 pm

JiggyWillis wrote:
Thu Mar 19, 2020 7:58 pm
I bought a slug of VWIUX in taxable in mid January and it is down over 6% counting today's 2.5% decline. I thought it would be more stable than this in a drawdown-certainly did not expect this type of volatility. I may use it to rebalance into Total Stock Market instead of using the money market funds I have been holding for that purpose.

Question: can I go under the $50k threshhold for VWIUX or will that trigger a problem?
I believe 50K is initial buy requirement. Once established you can reduced it.

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