Is BNDW still relevant?

[MO2040]

I have a simple two fund portfolio: VT + BNDW.

BNDW has taken and even when I look at 10 year returns for BND (as it has a longer history than BNDW), it's barely 1.22%. It makes me wonder if I should stop buying BNDW and move that portion to a High Yield Saving Account or a CD as they easily offer 4-5%? Is everybody else still buying BND/BNDW?

[jebmke]

I have a simple two fund portfolio: VT + BNDW.

BNDW has taken and even when I look at 10 year returns for BND (as it has a longer history than BNDW), it's barely 1.22%. It makes me wonder if I should stop buying BNDW and move that portion to a High Yield Saving Account or a CD as they easily offer 4-5%? Is everybody else still buying BND/BNDW?

Let me get this straight. You are comparing historical returns over the last 10 years to short term forward interest rates?

[muffins14]

I have a simple two fund portfolio: VT + BNDW.

BNDW has taken and even when I look at 10 year returns for BND (as it has a longer history than BNDW), it's barely 1.22%. It makes me wonder if I should stop buying BNDW and move that portion to a High Yield Saving Account or a CD as they easily offer 4-5%? Is everybody else still buying BND/BNDW?

Generally it is not good to sell something because it had recent dropped in value. Bond rates rise and fall over time. Currently, short rates are at a high point, hence prices are low for longer bonds.

If you are saving for retirement or in retirement, you probably want longer bonds, not cash.

[steadyosmosis]

I have a simple two fund portfolio: VT + BNDW.

BNDW has taken and even when I look at 10 year returns for BND (as it has a longer history than BNDW), it's barely 1.22%. It makes me wonder if I should stop buying BNDW and move that portion to a High Yield Saving Account or a CD as they easily offer 4-5%? Is everybody else still buying BND/BNDW?

Still relevant for me, except I buy BND instead.
I buy more when it gets cheaper, as in Oct 2022.

[secondopinion]

I have a simple two fund portfolio: VT + BNDW.

BNDW has taken and even when I look at 10 year returns for BND (as it has a longer history than BNDW), it's barely 1.22%. It makes me wonder if I should stop buying BNDW and move that portion to a High Yield Saving Account or a CD as they easily offer 4-5%? Is everybody else still buying BND/BNDW?

Apples to oranges here. Bonds do not work that way.

What was the yield to maturity 10 years ago for BND? It was probably close to 1.5% or something like that. Cash equivalents were probably 0.5%. Now, it is closer to 4.3% for the yield to maturity of BND. With some margin of error, we should expect 4% or so for BND the next ten years.

Neither a HYSA nor the CDs are going to guarantee their return for as long. If we know nothing better than the market, then the market is suggesting that short-term rates are not going to hold at the present levels.

[aj76er]

I’m still buying BNDW. I like the diversification, especially in light of recent political shenanigans in the U.S.

Backtesting shows that it performed as expected. The yield may be a little less than BND, but it also dropped less when the Fed started raising rates in 2022 because foreign banks rate changes were less and staggered.