VG International Bond Index Fund

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Almost there
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VG International Bond Index Fund

Post by Almost there » Sat Mar 02, 2013 5:31 pm

I received an email from VG informing me that they will be:
Adding international bond exposureWe're adding a new fund, Vanguard Total International Bond Index Fund, to each of our Target Retirement Funds. The funds will apportion 20% of their fixed income allocations to the new fund.

The international bond component will complement the three other core holdings of the Target Retirement Funds—Vanguard Total Stock Market Index Fund, Vanguard Total International Stock Index Fund, and Vanguard Total Bond Market II Index Fund.
For further info, please read:

http://www.vanguard.com/us/insights/art ... t-02062013


I guess I am rather confused about it and, not knowing more than what I read, also not too happy. I have both TR 2015 and Life Strategy Funds and neither of the info from VG offers a breakdown of how the funds will be allocated after VG has added the total International Bond Index Fund.

Perhaps someone here can enlighten me.

Almost there

minesweep
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Re: VG International Bond Index Fund

Post by minesweep » Sat Mar 02, 2013 5:40 pm


Dandy
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Re: VG International Bond Index Fund

Post by Dandy » Sat Mar 02, 2013 5:42 pm

Vanguard is trying to add more diversification to your fund by including an International Bond fund. It won't be a large portion of your fund - it will be 20% of whatever your fund now is allocating to bond funds. So if the fund is allocation 60% to Total Bond fund then when the new fund is added you will have 12% international bond fund and 48% total bond fund.

Hope this helps you understand what is happening. It may not make you like it any better though. Personally, I think it may be a good thing.

Almost there
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Re: VG International Bond Index Fund

Post by Almost there » Sat Mar 02, 2013 5:55 pm

minesweep,
I am sorry, I don't understand your posting since it doesn't answer my question.

Dandy,
Thank you for your explanation.

I am just very unhappy that VG is adding the international funds and will now be moving my funds away from TR and Life Strategy.

Almost there

stan1
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Re: VG International Bond Index Fund

Post by stan1 » Sat Mar 02, 2013 5:57 pm

Almost there wrote:minesweep,
I am sorry, I don't understand your posting since it doesn't answer my question.

Dandy,
Thank you for your explanation.

I am just very unhappy that VG is adding the international funds and will now be moving my funds away from TR and Life Strategy.

Almost there
Can you explain why you are unhappy these funds are adding international bonds? The 2 funds in question already hold international stocks.

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midareff
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Re: VG International Bond Index Fund

Post by midareff » Sat Mar 02, 2013 6:16 pm

anyone have a ticker for this Barclay's fund?

Almost there
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Re: VG International Bond Index Fund

Post by Almost there » Sat Mar 02, 2013 6:19 pm

Stan2 wrote:
Can you explain why you are unhappy these funds are adding international bonds? The 2 funds in question already hold international stocks.
I truly prefer not to hold any international funds and this is just adding more international funds to my holdings.

Almost there

stan1
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Re: VG International Bond Index Fund

Post by stan1 » Sat Mar 02, 2013 6:32 pm

Well the good news is that its easy to find out the asset allocation in the Target Retirement and Life Strategy funds.

For TR 2015:
40% Total Bond
38% Total Stock
16% Total International Stock
6% TIPS

Since you don't want international, you could do the following for a straight-forward 50/50 allocation:
50% Total Stock Market
40% Total Bond Market
10% TIPS

I don't think moving your investments outside of Vanguard will solve the problem; I expect some of the other mutual fund companies will follow Vanguard by adding international bonds to their target retirement funds (and there's no way to predict which ones will and which ones won't).

Almost there
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Re: VG International Bond Index Fund

Post by Almost there » Sat Mar 02, 2013 7:46 pm

Thank you Stan for the info. I know the percentage and am not happy with it anymore. And I wont move away from VG. Also thank you for your suggestion. It is very much appreciated. Will look also at other balanced funds.

Almost there

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zaboomafoozarg
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Re: VG International Bond Index Fund

Post by zaboomafoozarg » Sat Mar 02, 2013 8:00 pm

Almost there wrote:I am just very unhappy that VG is adding the international funds and will now be moving my funds away from TR and Life Strategy.
If you have TR and Life Strategy, you already have way more international stocks than you will bonds.

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Dale_G
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Re: VG International Bond Index Fund

Post by Dale_G » Sat Mar 02, 2013 8:52 pm

Adding International bonds may reduce volatility by a small amount. It isn't by itself a big deal, but a tenth of 1% here and a tenth of 1 percent there adds up after a while.

Successful long term investing involves playing the odds. Over the long haul, adding International bonds should improve risk adjusted returns. Only time will tell.

Dale
Volatility is my friend

Almost there
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Re: VG International Bond Index Fund

Post by Almost there » Sat Mar 02, 2013 9:17 pm

zaboomafoozarg wrote:
If you have TR and Life Strategy, you already have way more international stocks than you will bonds.
Dale_G wrote:
Successful long term investing involves playing the odds. Over the long haul, adding International bonds should improve risk adjusted returns. Only time will tell.
You are very much correct, however, this is not what I want to discuss.

I am just unhappy with VG that they are changing the fund and sending me an email without giving me complete info. This has now happened a number of times where incomplete info was given to me in an email, which I find frustrating. I have called but nothing has changed. Will have to think about how I will proceed.

Almost there

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JamesSFO
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Re: VG International Bond Index Fund

Post by JamesSFO » Sat Mar 02, 2013 9:20 pm

Almost there wrote: I am just unhappy with VG that they are changing the fund and sending me an email without giving me complete info. This has now happened a number of times where incomplete info was given to me in an email, which I find frustrating. I have called but nothing has changed. Will have to think about how I will proceed.
How were you given incomplete information? What other examples of this do you have? They provided notice reasonably well in advance of the new fund launching and described the proposed change.

Almost there
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Re: VG International Bond Index Fund

Post by Almost there » Sat Mar 02, 2013 9:34 pm

James SFO wrote:
How were you given incomplete information? What other examples of this do you have? They provided notice reasonably well in advance of the new fund launching and described the proposed change.
Having to come here and ask the question instead of VG giving me the complete info of the breakdown of the fund.

Anyway, enough of this.

Almost there

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JamesSFO
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Re: VG International Bond Index Fund

Post by JamesSFO » Sat Mar 02, 2013 9:55 pm

Almost there wrote: Having to come here and ask the question instead of VG giving me the complete info of the breakdown of the fund.
The email you were sent included a link to more information, that page information included these paragraphs:
The new international bond fund will represent 20% of the fixed income allocation of these funds and will complement their three other primary core holdings: Vanguard Total Stock Market Index Fund, Vanguard Total International Stock Index Fund, and Vanguard Total Bond Market II Index Fund.

Vanguard Target Retirement Funds will undergo a few additional changes. Vanguard Short-Term Inflation-Protected Securities Index Fund (Short-Term TIPS Fund) will replace Vanguard Inflation-Protected Securities Fund in the three Target Retirement Funds that offer exposure to TIPS: the Target Retirement Income, 2010, and 2015 Funds. In addition, the current allocations to Vanguard Prime Money Market Fund in the Target Retirement Income and Target Retirement 2010 Funds will be eliminated.
While perhaps not the exact tabular format you might have hoped, it did explain the details of the changes.

Almost there
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Re: VG International Bond Index Fund

Post by Almost there » Sun Mar 03, 2013 10:27 am

As far as I am concerned, VG did not.

Almost there

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iceport
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Re: VG International Bond Index Fund

Post by iceport » Sun Mar 03, 2013 10:31 am

Almost there wrote:As far as I am concerned, VG did not.

Almost there
Almost there,

It doesn't seem that there has been any new information presented here that wasn't offered by Vanguard. So I'm unclear on what disturbs you more, what you perceive to be a poor definition of the change, or the change itself.

--Pete
"Discipline matters more than allocation.” ─William Bernstein

Almost there
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Re: VG International Bond Index Fund

Post by Almost there » Sun Mar 03, 2013 11:33 am

Poor definition.

Almost there

VennData
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Re: VG International Bond Index Fund

Post by VennData » Sun Mar 03, 2013 11:48 am

Almost there wrote:I truly prefer not to hold any international funds and this is just adding more international funds to my holdings. Almost there
The funds are dollar-based. They use options to not give you exposure to the foreign currencies since that is what the back testing shows is the way to add this portfolio diversifier.

It's irrational to not want a portfolio diversifier. Why don't you want the most diversified portfolio?

stan1
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Re: VG International Bond Index Fund

Post by stan1 » Sun Mar 03, 2013 12:26 pm

Most of us have deeply held personnel convictions of one sort or another that appear irrational to those who do not share those convictions.

My father in law spent the winter of 1944/1945 camping out in southeastern Belgium. It was very cold and some Germans were shooting guns at him and his buddies. He has not wanted to leave the U.S. since his return from that expedition (68 years) and would never willingly purchase anything "Made in Germany". I can respect his point of view, although I don't think it is rational.

tibbitts
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Re: VG International Bond Index Fund

Post by tibbitts » Sun Mar 03, 2013 12:47 pm

Almost there wrote:Poor definition.

Almost there
You've reached the point where you'd be better off moving your investments out of VG to another company. Nothing wrong with that; VG would probably prefer you hold your investments elsewhere as well. Why not use one of the many other mutual fund companies that hasn't (in your view) mistreated you?

Paul

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JamesSFO
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Re: VG International Bond Index Fund

Post by JamesSFO » Sun Mar 03, 2013 1:26 pm

tibbitts wrote:
Almost there wrote:Poor definition.

Almost there
You've reached the point where you'd be better off moving your investments out of VG to another company. Nothing wrong with that; VG would probably prefer you hold your investments elsewhere as well. Why not use one of the many other mutual fund companies that hasn't (in your view) mistreated you?

Paul
+1 and also to the OP, I do worry you may be dissatisfied with just about any company.

ResNullius
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Re: VG International Bond Index Fund

Post by ResNullius » Sun Mar 03, 2013 1:33 pm

My father in law spent the winter of 1944/1945 camping out in southeastern Belgium. It was very cold and some Germans were shooting guns at him and his buddies. He has not wanted to leave the U.S. since his return from that expedition (68 years) and would never willingly purchase anything "Made in Germany". I can respect his point of view, although I don't think it is rational.
==============
I think it's rational, and the same applies for vets of all wars. It's rational to have a hard time forgetting about what another nationality has done to you, particularly if they did their best to kill you, and they were successful in killing millions of others, some of whom you knew by name and shared a foxhole with.

Almost there
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Re: VG International Bond Index Fund

Post by Almost there » Sun Mar 03, 2013 5:20 pm

Thank you, Stan1, for showing some understanding. And remember, I don't have to justify my reason to anyone, but I understand that you will want to know.

And, no, as I mentioned previously, I am not moving my funds away from VG. I am just frustrated with some of the things VG does. At the end it'll work out o.k. since I have faith in VG.

Please now don't come back by asking more questions which have absolutely nothing to do with my original posting. My question was answered. There are a lot of postings here I don't agree with, however, I would never consider even asking the person why they are posting their comments. Remember, everyone has a right to their opnion.

Almost there.

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Random Musings
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Re: VG International Bond Index Fund

Post by Random Musings » Mon Mar 04, 2013 4:06 pm

Almost there wrote:Stan2 wrote:
Can you explain why you are unhappy these funds are adding international bonds? The 2 funds in question already hold international stocks.
I truly prefer not to hold any international funds and this is just adding more international funds to my holdings.

Almost there
Do you perceive international holdings too risky, do you expect them to underperform (relative to domestic holdings) or is it simply that you are afraid of the unknown?

Truth be told, I expect int'l equities to outperform domestic over the next 5-10 years.

RM
I figure the odds be fifty-fifty I just might have something to say. FZ

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