Bonds and high tax bracket

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Topic Author
lazaro53
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Joined: Fri May 22, 2020 2:12 pm

Bonds and high tax bracket

Post by lazaro53 » Thu Jun 25, 2020 11:15 pm

I have asked about this already but I am trying to learn, still confuse about bonds and taxes, reading a lot lately.

We are in 32 tax bracket

Would it be better to use this fund in 401K ? PICNX. It says the fee is 0.49 (morningstar) This is the only bond fund in 401K. I don't know how to evaluate this fund.
Or put bonds in taxable. Which bonds? I have been reading about municipal bonds for high tax bracket.



Thank You

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goodenyou
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Re: Bonds in high tax bracket

Post by goodenyou » Thu Jun 25, 2020 11:25 pm

More information needed. State of residence? State tax? First, pick an asset allocation that you are comfortable with. Then, pick low cost funds that mirror an index fund in your 401k. For example, I have lousy choices in my 401k. The best option for me is an S&P Index fund with 40 basis points expense ratio. The bond funds i have to choose from are crap. So, I put more of my total portfolio AA in the lowest cost equities index fund in my 401k and I use VWIUX (Vanguard Intermediate-Term Tax-Exempt) to fill my bond total portfolio AA in my taxable space. Sometimes you have to adapt to the hand that is dealt to you. I am in a high Federal tax bracket and no state income tax. You may want to use your state-specific munis if you are in a highly taxed state. It will save on state income taxes.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

Topic Author
lazaro53
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Re: Bonds and high tax bracket

Post by lazaro53 » Thu Jun 25, 2020 11:34 pm

Thank You

Florida

Only 3 index funds in 401K. 0.04 fee

I have munis in taxable but I read a lot about risk.

Topic Author
lazaro53
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Re: Bonds in high tax bracket

Post by lazaro53 » Thu Jun 25, 2020 11:57 pm

goodenyou wrote:
Thu Jun 25, 2020 11:25 pm
More information needed. State of residence? State tax? First, pick an asset allocation that you are comfortable with. Then, pick low cost funds that mirror an index fund in your 401k. For example, I have lousy choices in my 401k. The best option for me is an S&P Index fund with 40 basis points expense ratio. The bond funds i have to choose from are crap. So, I put more of my total portfolio AA in the lowest cost equities index fund in my 401k and I use VWIUX (Vanguard Intermediate-Term Tax-Exempt) to fill my bond total portfolio AA in my taxable space. Sometimes you have to adapt to the hand that is dealt to you. I am in a high Federal tax bracket and no state income tax. You may want to use your state-specific munis if you are in a highly taxed state. It will save on state income taxes.
Thank You

Florida

Only 3 index funds in 401K. 0.04 fee

I have munis in taxable but I read a lot about risk.

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Stinky
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Re: Bonds and high tax bracket

Post by Stinky » Fri Jun 26, 2020 6:45 am

In general, Bogleheads would suggest putting fixed income assets in tax-deferred accounts like 401(k)s.

In looking at PICNX (Principal Core Fixed Income) on Morningstar, I see that it has an SEC yield of 1.74% after expenses. That isn't bad for an intermediate term bond fund. It has a "four-star" rating, which means that its yield is higher than the average of its category.

In a 32% tax bracket, I think that it would make sense to use this bond fund as part of your fixed income allocation.
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Re: Bonds and high tax bracket

Post by Clever_Username » Fri Jun 26, 2020 7:37 am

I think you may benefit from making a full portfolio post and asking this as one of them: viewtopic.php?f=1&t=6212

While the general advice involves equities in taxable, depending on your state of residence and marginal bracket, you might benefit more from municipal bonds in taxable instead of equities.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ | | I survived my first downturn and all I got was this signature line.

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goodenyou
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Re: Bonds and high tax bracket

Post by goodenyou » Fri Jun 26, 2020 7:47 am

PICNX has over 30% BBB bonds in its portfolio. VWIUX has about 6% BBB and 90+% AAA/AA/A in its portfolio. That would make a difference to me. I would lean toward a better low cost bond fund in taxable. You are in a no income tax state of Florida, so VWIUX would be a good choice in my opinion.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

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Re: Bonds and high tax bracket

Post by UpperNwGuy » Fri Jun 26, 2020 8:45 am

I would go with the municipal bond solution.

Topic Author
lazaro53
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Re: Bonds and high tax bracket

Post by lazaro53 » Fri Jun 26, 2020 12:40 pm

Stinky wrote:
Fri Jun 26, 2020 6:45 am
In general, Bogleheads would suggest putting fixed income assets in tax-deferred accounts like 401(k)s.

In looking at PICNX (Principal Core Fixed Income) on Morningstar, I see that it has an SEC yield of 1.74% after expenses. That isn't bad for an intermediate term bond fund. It has a "four-star" rating, which means that its yield is higher than the average of its category.

In a 32% tax bracket, I think that it would make sense to use this bond fund as part of your fixed income allocation.
thank you

Topic Author
lazaro53
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Joined: Fri May 22, 2020 2:12 pm

Re: Bonds and high tax bracket

Post by lazaro53 » Fri Jun 26, 2020 12:40 pm

Clever_Username wrote:
Fri Jun 26, 2020 7:37 am
I think you may benefit from making a full portfolio post and asking this as one of them: viewtopic.php?f=1&t=6212

While the general advice involves equities in taxable, depending on your state of residence and marginal bracket, you might benefit more from municipal bonds in taxable instead of equities.
thank you

Topic Author
lazaro53
Posts: 26
Joined: Fri May 22, 2020 2:12 pm

Re: Bonds and high tax bracket

Post by lazaro53 » Fri Jun 26, 2020 12:41 pm

goodenyou wrote:
Fri Jun 26, 2020 7:47 am
PICNX has over 30% BBB bonds in its portfolio. VWIUX has about 6% BBB and 90+% AAA/AA/A in its portfolio. That would make a difference to me. I would lean toward a better low cost bond fund in taxable. You are in a no income tax state of Florida, so VWIUX would be a good choice in my opinion.
thanks

Topic Author
lazaro53
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Re: Bonds and high tax bracket

Post by lazaro53 » Fri Jun 26, 2020 12:41 pm

UpperNwGuy wrote:
Fri Jun 26, 2020 8:45 am
I would go with the municipal bond solution.
thank you

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grabiner
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Re: Bonds and high tax bracket

Post by grabiner » Sat Jun 27, 2020 12:35 pm

lazaro53 wrote:
Thu Jun 25, 2020 11:15 pm
I have asked about this already but I am trying to learn, still confuse about bonds and taxes, reading a lot lately.

We are in 32 tax bracket

Would it be better to use this fund in 401K ? PICNX. It says the fee is 0.49 (morningstar) This is the only bond fund in 401K. I don't know how to evaluate this fund.
Or put bonds in taxable. Which bonds? I have been reading about municipal bonds for high tax bracket.
Whether this is the right fund for your 401(k) depends on the other options. If your 401(k) has a low-cost S&P 500 index, then you can hold that fund in your 401(k), hold international stocks in your IRA or taxable account, and hold municipal bonds in your taxable account. If the stock and bond funds in your 401(k) have about the same expenses (for example, they are all R6 share classes of Principal funds), then you can ignore the extra expenses in deciding what to put in the 401(k); an extra 0.4% in expenses just means that you will lose 8% of the 401(k) if you stay 20 years with the employer.

If you do hold bonds in your taxable account, they should be munis.
Wiki David Grabiner

Buckrodgerz
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Re: Bonds and high tax bracket

Post by Buckrodgerz » Sat Jun 27, 2020 1:18 pm

I'm not an expert but this seems to be tax efficient for my 32% tax bracket:
Keep corporate and U.S. bonds in the tax deferred accounts (IRA).
Muni's and low yield bonds in the taxable accounts (i.e, Trust). I like VTMFX balanced fund in my taxable portfolio (it's half muni's).

Topic Author
lazaro53
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Re: Bonds and high tax bracket

Post by lazaro53 » Sun Jun 28, 2020 7:31 pm

grabiner wrote:
Sat Jun 27, 2020 12:35 pm
lazaro53 wrote:
Thu Jun 25, 2020 11:15 pm
I have asked about this already but I am trying to learn, still confuse about bonds and taxes, reading a lot lately.

We are in 32 tax bracket

Would it be better to use this fund in 401K ? PICNX. It says the fee is 0.49 (morningstar) This is the only bond fund in 401K. I don't know how to evaluate this fund.
Or put bonds in taxable. Which bonds? I have been reading about municipal bonds for high tax bracket.
Whether this is the right fund for your 401(k) depends on the other options. If your 401(k) has a low-cost S&P 500 index, then you can hold that fund in your 401(k), hold international stocks in your IRA or taxable account, and hold municipal bonds in your taxable account. If the stock and bond funds in your 401(k) have about the same expenses (for example, they are all R6 share classes of Principal funds), then you can ignore the extra expenses in deciding what to put in the 401(k); an extra 0.4% in expenses just means that you will lose 8% of the 401(k) if you stay 20 years with the employer.

If you do hold bonds in your taxable account, they should be munis.
Thank You

How do I know if the index is R6 fund? There is not a ticker symbol and I can not find it in morningstar, when I call customer service they dont know, I dont know how to find the fund in the prospectus. It just says: LargeCap S&P 500 Index Separate Account-Z.
Thanks

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grabiner
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Re: Bonds and high tax bracket

Post by grabiner » Sun Jun 28, 2020 11:21 pm

lazaro53 wrote:
Sun Jun 28, 2020 7:31 pm
grabiner wrote:
Sat Jun 27, 2020 12:35 pm
Whether [PICNX, Principal Core Bond Fund R6] this is the right fund for your 401(k) depends on the other options. If your 401(k) has a low-cost S&P 500 index, then you can hold that fund in your 401(k), hold international stocks in your IRA or taxable account, and hold municipal bonds in your taxable account. If the stock and bond funds in your 401(k) have about the same expenses (for example, they are all R6 share classes of Principal funds), then you can ignore the extra expenses in deciding what to put in the 401(k); an extra 0.4% in expenses just means that you will lose 8% of the 401(k) if you stay 20 years with the employer.
Thank You

How do I know if the index is R6 fund? There is not a ticker symbol and I can not find it in morningstar, when I call customer service they dont know, I dont know how to find the fund in the prospectus. It just says: LargeCap S&P 500 Index Separate Account-Z.
Since this is a "separate account", it is not a regular Principal fund, and thus does not have the same type of share class structure.
Check the expense ratio, which should be in the prospectus or other documents for this fund. You can also compare the returns of this account with the returns of the index over the same time period.
Wiki David Grabiner

Topic Author
lazaro53
Posts: 26
Joined: Fri May 22, 2020 2:12 pm

Re: Bonds and high tax bracket

Post by lazaro53 » Sun Jun 28, 2020 11:48 pm

grabiner wrote:
Sun Jun 28, 2020 11:21 pm
lazaro53 wrote:
Sun Jun 28, 2020 7:31 pm
grabiner wrote:
Sat Jun 27, 2020 12:35 pm
Whether [PICNX, Principal Core Bond Fund R6] this is the right fund for your 401(k) depends on the other options. If your 401(k) has a low-cost S&P 500 index, then you can hold that fund in your 401(k), hold international stocks in your IRA or taxable account, and hold municipal bonds in your taxable account. If the stock and bond funds in your 401(k) have about the same expenses (for example, they are all R6 share classes of Principal funds), then you can ignore the extra expenses in deciding what to put in the 401(k); an extra 0.4% in expenses just means that you will lose 8% of the 401(k) if you stay 20 years with the employer.
Thank You

How do I know if the index is R6 fund? There is not a ticker symbol and I can not find it in morningstar, when I call customer service they dont know, I dont know how to find the fund in the prospectus. It just says: LargeCap S&P 500 Index Separate Account-Z.
Since this is a "separate account", it is not a regular Principal fund, and thus does not have the same type of share class structure.
Check the expense ratio, which should be in the prospectus or other documents for this fund. You can also compare the returns of this account with the returns of the index over the same time period.
Thank You

The expense says 0.05, but These are the returns
Based on this would you say the expense is 0.05 or more ?

displayed are based on net total investment expense.
Long Term Returns Year To Date 1 Year 3 Year 5 Year 10 Year
Total Return % -19.57 -7.00 5.06 6.67 10.46
Standard & Poor's 500 Index % -19.60 -6.98 5.10 6.73 10.53
Large Blend Category % -20.92 -9.97 2.80 4.46 8.84


Annual Returns 2019 2018 2017 2016 2015
Total Return % 31.38 -4.41 21.73 11.89 1.34
Standard & Poor's 500 Index % 31.49 -4.38 21.83 11.96 1.38
Large Blend Category % 28.78 -6.27 20.44 10.37 -1.07

Morningstar Percentile Rankings 27 25 31 28 20
# of Funds in Category 1387 1402 1396 1409 1606


This is the Core Fixed Income Separate Account-Z that says is 0.31
displayed are based on net total investment expense.

Long TermR eturns Year To Date 1 Year 3 Year 5 Year 10 Year
Total R eturn % - 0.41 5.02 4.13 3.35 4.70
Bloomberg Barclays Aggregate Bond Index 3.15 8.93 4.82 3.36 3.88
Intermediate Core Bond Category % 1.57 6.78 3.90 2.74 3.51


Annual Returns 2019 2018 2017 2016 2015
Total Return % 9.27 0.38 4.84 5.68 -0.80
Bloomberg Barclays Aggregate Bond Index 8.72 0.01 3.54 2.65 0.55
Intermediate Core Bond Category % 8.06 -0.50 3.71 3.23 -0.26

Thank You

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grabiner
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Re: Bonds and high tax bracket

Post by grabiner » Mon Jun 29, 2020 9:10 am

BLUF: The two separate accounts are a US stock index with 0.05% expenses and a bond fund with 0.31% expenses. Both seem to be doing their job, but since the stock index is less expensive, it is the fund you want to hold in the 401(k). If the 401(k) is all US stock, hold munis in your taxable account, and international stock in your IRA or taxable account. If the 401(k) is larger than your target allocation to US stock, hold the core bond separate account there since it is the next-lowest expensive fund (unless there is a similar international stock fund.)
lazaro53 wrote:
Sun Jun 28, 2020 11:48 pm
grabiner wrote:
Sun Jun 28, 2020 11:21 pm
Since this is a "separate account", it is not a regular Principal fund, and thus does not have the same type of share class structure.
Check the expense ratio, which should be in the prospectus or other documents for this fund. You can also compare the returns of this account with the returns of the index over the same time period.
Thank You

The expense says 0.05, but These are the returns
Based on this would you say the expense is 0.05 or more ?

displayed are based on net total investment expense.
Long Term Returns Year To Date 1 Year 3 Year 5 Year 10 Year
Total Return % -19.57 -7.00 5.06 6.67 10.46
Standard & Poor's 500 Index % -19.60 -6.98 5.10 6.73 10.53
Large Blend Category % -20.92 -9.97 2.80 4.46 8.84


Annual Returns 2019 2018 2017 2016 2015
Total Return % 31.38 -4.41 21.73 11.89 1.34
Standard & Poor's 500 Index % 31.49 -4.38 21.83 11.96 1.38
Large Blend Category % 28.78 -6.27 20.44 10.37 -1.07
This is consistent with a 0.05% expense. Over ten years, it underperformed the index by 0.07%, and over the last five, the underperformance is 0.04%, 0.07%, 0.10%, 0.03%, and 0.11%. This is what you should expect for an index fund; it underperforms the index by its expense ratio, with a few points of random fluctuations. (The comparison to the "Large Blend Category" on Morningstar shows the advantage of index funds; both this fund and the index have consistently beaten the average fund, primarily because the average fund has higher expenses.)
This is the Core Fixed Income Separate Account-Z that says is 0.31
displayed are based on net total investment expense.

Long TermR eturns Year To Date 1 Year 3 Year 5 Year 10 Year
Total R eturn % - 0.41 5.02 4.13 3.35 4.70
Bloomberg Barclays Aggregate Bond Index 3.15 8.93 4.82 3.36 3.88
Intermediate Core Bond Category % 1.57 6.78 3.90 2.74 3.51


Annual Returns 2019 2018 2017 2016 2015
Total Return % 9.27 0.38 4.84 5.68 -0.80
Bloomberg Barclays Aggregate Bond Index 8.72 0.01 3.54 2.65 0.55
Intermediate Core Bond Category % 8.06 -0.50 3.71 3.23 -0.26
The inconsistent returns suggest that this fund is not tracking the Aggregate Bond Index, and the poor recent returns suggest that it probably has more corporate bonds than the index, since Treasury bonds outperformed corporate bonds. I would trust that 0.31% is the correct expense ratio, and that this fund is a suitable core bond holding, but it is riskier than the index fund. (This is neither good nor bad, just something you need to be aware of; a portfolio of 60% stocks and 40% in this bond fund might have both the risk and return of a portfolio of 65% stocks and 35% in the Barclays Aggregate Bond Index.)
Wiki David Grabiner

Topic Author
lazaro53
Posts: 26
Joined: Fri May 22, 2020 2:12 pm

Re: Bonds and high tax bracket

Post by lazaro53 » Mon Jun 29, 2020 9:19 am

lazaro53 wrote:
Sun Jun 28, 2020 11:48 pm
grabiner wrote:
Sun Jun 28, 2020 11:21 pm
lazaro53 wrote:
Sun Jun 28, 2020 7:31 pm
grabiner wrote:
Sat Jun 27, 2020 12:35 pm
Whether [PICNX, Principal Core Bond Fund R6] this is the right fund for your 401(k) depends on the other options. If your 401(k) has a low-cost S&P 500 index, then you can hold that fund in your 401(k), hold international stocks in your IRA or taxable account, and hold municipal bonds in your taxable account. If the stock and bond funds in your 401(k) have about the same expenses (for example, they are all R6 share classes of Principal funds), then you can ignore the extra expenses in deciding what to put in the 401(k); an extra 0.4% in expenses just means that you will lose 8% of the 401(k) if you stay 20 years with the employer.
Thank You

How do I know if the index is R6 fund? There is not a ticker symbol and I can not find it in morningstar, when I call customer service they dont know, I dont know how to find the fund in the prospectus. It just says: LargeCap S&P 500 Index Separate Account-Z.
Since this is a "separate account", it is not a regular Principal fund, and thus does not have the same type of share class structure.
Check the expense ratio, which should be in the prospectus or other documents for this fund. You can also compare the returns of this account with the returns of the index over the same time period.
Thank You

The expense says 0.05, but These are the returns
Based on this would you say the expense is 0.05 or more ?

displayed are based on net total investment expense.
Long Term Returns Year To Date 1 Year 3 Year 5 Year 10 Year
Total Return % -19.57 -7.00 5.06 6.67 10.46
Standard & Poor's 500 Index % -19.60 -6.98 5.10 6.73 10.53
Large Blend Category % -20.92 -9.97 2.80 4.46 8.84


Annual Returns 2019 2018 2017 2016 2015
Total Return % 31.38 -4.41 21.73 11.89 1.34
Standard & Poor's 500 Index % 31.49 -4.38 21.83 11.96 1.38
Large Blend Category % 28.78 -6.27 20.44 10.37 -1.07

Morningstar Percentile Rankings 27 25 31 28 20
# of Funds in Category 1387 1402 1396 1409 1606


This is the Core Fixed Income Separate Account-Z that says is 0.31
displayed are based on net total investment expense.

Long TermR eturns Year To Date 1 Year 3 Year 5 Year 10 Year
Total R eturn % - 0.41 5.02 4.13 3.35 4.70
Bloomberg Barclays Aggregate Bond Index 3.15 8.93 4.82 3.36 3.88
Intermediate Core Bond Category % 1.57 6.78 3.90 2.74 3.51


Annual Returns 2019 2018 2017 2016 2015
Total Return % 9.27 0.38 4.84 5.68 -0.80
Bloomberg Barclays Aggregate Bond Index 8.72 0.01 3.54 2.65 0.55
Intermediate Core Bond Category % 8.06 -0.50 3.71 3.23 -0.26

Thank You
Thank You!!!!!

Topic Author
lazaro53
Posts: 26
Joined: Fri May 22, 2020 2:12 pm

Re: Bonds and high tax bracket

Post by lazaro53 » Mon Jun 29, 2020 9:25 am

grabiner wrote:
Mon Jun 29, 2020 9:10 am
BLUF: The two separate accounts are a US stock index with 0.05% expenses and a bond fund with 0.31% expenses. Both seem to be doing their job, but since the stock index is less expensive, it is the fund you want to hold in the 401(k). If the 401(k) is all US stock, hold munis in your taxable account, and international stock in your IRA or taxable account. If the 401(k) is larger than your target allocation to US stock, hold the core bond separate account there since it is the next-lowest expensive fund (unless there is a similar international stock fund.)
lazaro53 wrote:
Sun Jun 28, 2020 11:48 pm
grabiner wrote:
Sun Jun 28, 2020 11:21 pm
Since this is a "separate account", it is not a regular Principal fund, and thus does not have the same type of share class structure.
Check the expense ratio, which should be in the prospectus or other documents for this fund. You can also compare the returns of this account with the returns of the index over the same time period.
Thank You

The expense says 0.05, but These are the returns
Based on this would you say the expense is 0.05 or more ?

displayed are based on net total investment expense.
Long Term Returns Year To Date 1 Year 3 Year 5 Year 10 Year
Total Return % -19.57 -7.00 5.06 6.67 10.46
Standard & Poor's 500 Index % -19.60 -6.98 5.10 6.73 10.53
Large Blend Category % -20.92 -9.97 2.80 4.46 8.84


Annual Returns 2019 2018 2017 2016 2015
Total Return % 31.38 -4.41 21.73 11.89 1.34
Standard & Poor's 500 Index % 31.49 -4.38 21.83 11.96 1.38
Large Blend Category % 28.78 -6.27 20.44 10.37 -1.07
This is consistent with a 0.05% expense. Over ten years, it underperformed the index by 0.07%, and over the last five, the underperformance is 0.04%, 0.07%, 0.10%, 0.03%, and 0.11%. This is what you should expect for an index fund; it underperforms the index by its expense ratio, with a few points of random fluctuations. (The comparison to the "Large Blend Category" on Morningstar shows the advantage of index funds; both this fund and the index have consistently beaten the average fund, primarily because the average fund has higher expenses.)
This is the Core Fixed Income Separate Account-Z that says is 0.31
displayed are based on net total investment expense.

Long TermR eturns Year To Date 1 Year 3 Year 5 Year 10 Year
Total R eturn % - 0.41 5.02 4.13 3.35 4.70
Bloomberg Barclays Aggregate Bond Index 3.15 8.93 4.82 3.36 3.88
Intermediate Core Bond Category % 1.57 6.78 3.90 2.74 3.51


Annual Returns 2019 2018 2017 2016 2015
Total Return % 9.27 0.38 4.84 5.68 -0.80
Bloomberg Barclays Aggregate Bond Index 8.72 0.01 3.54 2.65 0.55
Intermediate Core Bond Category % 8.06 -0.50 3.71 3.23 -0.26
The inconsistent returns suggest that this fund is not tracking the Aggregate Bond Index, and the poor recent returns suggest that it probably has more corporate bonds than the index, since Treasury bonds outperformed corporate bonds. I would trust that 0.31% is the correct expense ratio, and that this fund is a suitable core bond holding, but it is riskier than the index fund. (This is neither good nor bad, just something you need to be aware of; a portfolio of 60% stocks and 40% in this bond fund might have both the risk and return of a portfolio of 65% stocks and 35% in the Barclays Aggregate Bond Index.)
Thank You!!!!

aristotelian
Posts: 7587
Joined: Wed Jan 11, 2017 8:05 pm

Re: Bonds and high tax bracket

Post by aristotelian » Mon Jun 29, 2020 1:19 pm

Any chance you have a target date fund available with a low expense ratio?

Topic Author
lazaro53
Posts: 26
Joined: Fri May 22, 2020 2:12 pm

Re: Bonds and high tax bracket

Post by lazaro53 » Mon Jun 29, 2020 2:07 pm

aristotelian wrote:
Mon Jun 29, 2020 1:19 pm
Any chance you have a target date fund available with a low expense ratio?
Hello

Target date funds are 0.27,
Only bond fund is 0.31, and the 3 index 0.05. International and etc are 0.75 or worse
And the administrative fee that is 0.39 or maybe 0.49. (not sure)

Thanks

aristotelian
Posts: 7587
Joined: Wed Jan 11, 2017 8:05 pm

Re: Bonds and high tax bracket

Post by aristotelian » Mon Jun 29, 2020 2:17 pm

lazaro53 wrote:
Mon Jun 29, 2020 2:07 pm
aristotelian wrote:
Mon Jun 29, 2020 1:19 pm
Any chance you have a target date fund available with a low expense ratio?
Hello

Target date funds are 0.27,
Only bond fund is 0.31, and the 3 index 0.05. International and etc are 0.75 or worse
And the administrative fee that is 0.39 or maybe 0.49. (not sure)

Thanks
Hm. .31 really isn't that bad. I think I would just do that rather than hold bonds in taxable. Otherwise you will be paying income tax on stock gains in your 401k.

Topic Author
lazaro53
Posts: 26
Joined: Fri May 22, 2020 2:12 pm

Re: Bonds and high tax bracket

Post by lazaro53 » Mon Jun 29, 2020 2:32 pm

aristotelian wrote:
Mon Jun 29, 2020 2:17 pm
lazaro53 wrote:
Mon Jun 29, 2020 2:07 pm
aristotelian wrote:
Mon Jun 29, 2020 1:19 pm
Any chance you have a target date fund available with a low expense ratio?
Hello

Target date funds are 0.27,
Only bond fund is 0.31, and the 3 index 0.05. International and etc are 0.75 or worse
And the administrative fee that is 0.39 or maybe 0.49. (not sure)

Thanks
Hm. .31 really isn't that bad. I think I would just do that rather than hold bonds in taxable. Otherwise you will be paying income tax on stock gains in your 401k.
0.31 plus the 0.49 (or 0.39) would be acceptable? I am afraid of our money not growing due to these fees.

Thanks

aristotelian
Posts: 7587
Joined: Wed Jan 11, 2017 8:05 pm

Re: Bonds and high tax bracket

Post by aristotelian » Mon Jun 29, 2020 2:41 pm

lazaro53 wrote:
Mon Jun 29, 2020 2:32 pm
aristotelian wrote:
Mon Jun 29, 2020 2:17 pm
lazaro53 wrote:
Mon Jun 29, 2020 2:07 pm
aristotelian wrote:
Mon Jun 29, 2020 1:19 pm
Any chance you have a target date fund available with a low expense ratio?
Hello

Target date funds are 0.27,
Only bond fund is 0.31, and the 3 index 0.05. International and etc are 0.75 or worse
And the administrative fee that is 0.39 or maybe 0.49. (not sure)

Thanks
Hm. .31 really isn't that bad. I think I would just do that rather than hold bonds in taxable. Otherwise you will be paying income tax on stock gains in your 401k.
0.31 plus the 0.49 (or 0.39) would be acceptable? I am afraid of our money not growing due to these fees.

Thanks
Won't the admin fee be charged no matter what you invest in? Regardless, bonds are for stability and non-correlation, not growth. Yields are low right now, but so is inflation.

Topic Author
lazaro53
Posts: 26
Joined: Fri May 22, 2020 2:12 pm

Re: Bonds and high tax bracket

Post by lazaro53 » Mon Jun 29, 2020 2:43 pm

aristotelian wrote:
Mon Jun 29, 2020 2:41 pm
lazaro53 wrote:
Mon Jun 29, 2020 2:32 pm
aristotelian wrote:
Mon Jun 29, 2020 2:17 pm
lazaro53 wrote:
Mon Jun 29, 2020 2:07 pm
aristotelian wrote:
Mon Jun 29, 2020 1:19 pm
Any chance you have a target date fund available with a low expense ratio?
Hello

Target date funds are 0.27,
Only bond fund is 0.31, and the 3 index 0.05. International and etc are 0.75 or worse
And the administrative fee that is 0.39 or maybe 0.49. (not sure)

Thanks
Hm. .31 really isn't that bad. I think I would just do that rather than hold bonds in taxable. Otherwise you will be paying income tax on stock gains in your 401k.
0.31 plus the 0.49 (or 0.39) would be acceptable? I am afraid of our money not growing due to these fees.

Thanks
Won't the admin fee be charged no matter what you invest in? Regardless, bonds are for stability and non-correlation, not growth. Yields are low right now, but so is inflation.
True, thanks a lot

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