I have been thinking about this for a few days now, whats the boards take on this, what is the real duration of the fund?
Doc wrote:Jay69 wrote:One of those little pesky things I don't care for about Vanguards Total Bond Fund VBTLX/BND with its 5.2 years average duration is those pesky longer bonds.
10 - 20 Years 4.1%
20 - 30 Years 9.8%
Over 30 Years 0.4%
Overall will it make a difference, no clue?
Something is really really screwy here. Morningstar has as of 9/30/12 for VBTIX and 1/25/13 for AGG. Jay's number are from Vanguad as of 12/31/12.
Code: Select all
10-20 years 8.87% 9.55
20-30 years 29.41 34.19
over 30 years 5.07 2.83
Duration 4.97 4.59
AGG is iShares Core Total US Bond Market ETF AGG (Bar Cap Agg Index)
If the older M* data and the more current AGG data are correct the problem of the long bonds is even worse than you think.
In any case you could use IShares GVI - Bar Cap Intermediate (1-10) Gov/Credit - with a duration of only 3.85 years. You would have to add an MBS fund like GNMA if you wanted mrotgage backed. (I don't.)