Poll: Do you own Total Bond Market?

timboktoo · Post by **timboktoo** » Sat May 10, 2014 10:27 pm

I've been reading through past threads about Total Bond Market and am curious what percentage of Bogleheads own it.

- Tim

Peter Foley · Post by **Peter Foley** » Sat May 10, 2014 11:04 pm

Yes, although it is a small percentage of my non equities.

Johm221122 · Post by **Johm221122** » Sat May 10, 2014 11:12 pm

Most of my fixed is in 401 and it's not a choice.My only two real choices are Pimco at an exspense ratio of my1 5% or a stable value paying 1.5% .I choose the stable value.I plan on adding total bond index in Roth at next time my plan says to increase fixed income

John

joe8d · Post by **joe8d** » Sat May 10, 2014 11:14 pm

As part of my Roth LS Fund.My main bond fund is STIG.

madbrain · Post by **madbrain** » Sun May 11, 2014 12:01 am

Nope. I prefer to hold a stable value fund in my 401k, even though institutional shares of Vanguard TBM are available.
My other bonds are high-yield in Roth IRA, and munis in taxable.

NightOwl · Post by **NightOwl** » Sun May 11, 2014 12:16 am

I hold 100% of my bond allocation in my 401(k) in Advantage Class shares of Fidelity's Spartan U.S. Bond Index Fund (FSITX), which I consider a near-equivalent to Admiral shares of Vanguard's Total Bond Fund Index Fund (VBTLX).

NightOwl

dumbbunny · Post by **dumbbunny** » Sun May 11, 2014 12:45 am

65% of my 50% bond allocation is in VBTLX and that will be rebalanced to 80% of my 50% bond allocation. All tax-deferred.

fourwedge · Post by **fourwedge** » Sun May 11, 2014 12:56 am

Yes, I just bought 10% bonds today. I was 100% equity till 2 days ago, now I'm putting 33% of new maxed out 401k money in VBTLX going forward. That is until I find a bond fund or strategy I like better. Still don't know the bond market too well.

steve roy · Post by **steve roy** » Sun May 11, 2014 2:01 am

The Mrs. holds it in Target Retirement Income. I opt for other Vanguard bond funds.

NAVigator · Post by **NAVigator** » Sun May 11, 2014 4:37 am

When Jack Bogle gave a convincing recommendation to include corporates, I split my Total Bond allocation, moving half into Intermediate Investment Grade (VFIDX). It has done well for me.

ajcp · Post by **ajcp** » Sun May 11, 2014 4:57 am

My 401k has intermediate index but not total bond, so no I do not.

VTXVX · Post by **VTXVX** » Sun May 11, 2014 5:30 am

Delete

trasmuss · Post by **trasmuss** » Sun May 11, 2014 5:38 am

Total Bond represents 30% of our portfolio. We also have 5% in the Total International Bond and 14% in a stable value (1% money market to bring it to 50%).

I am watching the International Bond fund. If I end up not feeling it adds value that portion will be going back to the Total Bond.

I have thought about putting some in either Short Term Investment Grade or Intermediate Term Investment Grade. But for now I'm satisfied having about 30% of the bonds corporate. Treasuries don't pay much in this environment but they shine just when you need them most (e.g. 2008).

I am taking a total return rather than income approach to our portfolio. Other than receiving dividends for a taxable S&P 500 fund when I need funds from my tax deferred funds I simply take from bonds or stocks depending upon which have done better (to bring back to 50-50). The lower yield on Total Bond therefore doesn't bother me as much as it would if I were depending solely upon the income. Everyone will have their own approach and needs.

nisiprius · Post by **nisiprius** » Sun May 11, 2014 6:22 am

I am very conservative and am in early retirement and am simply stating what we do, it should not be taken as any kind of recommendation or model. The things that I have that are not like stocks and not like cash have a breakdown about like this: 40% Total Bond Market, 40% individual TIPS, and 20% series I savings bonds.

pennstater2005 · Post by **pennstater2005** » Sun May 11, 2014 6:25 am

20% total bond for me and 10% for the wife.

BigJohn · Post by **BigJohn** » Sun May 11, 2014 6:32 am

Yes but only about 10% of bond allocation is in Total Bond all in a traditional IRA. About 45% in a Stable Value Fund earning just over 3% in my 401(k), The other 45% is in a taxable account and split between VG Limited, Intermediate and Long Term Muni Bond Funds.

IlliniDave · Post by **IlliniDave** » Sun May 11, 2014 6:51 am

I answered yes because of a fund (non-Vanguard) in my 401k that tracks the Barclays Capital US Aggregate Bond Index, and I assume that's what is meant by "Total Bond Market"

Dandy · Post by **Dandy** » Sun May 11, 2014 7:01 am

Yes I own it. Along with several other VG bond funds - Good fund but I like to diversify/tilt a bit more.

Toons · Post by **Toons** » Sun May 11, 2014 7:20 am

ofcmetz · Post by **ofcmetz** » Sun May 11, 2014 7:52 am

I own a similar but different fund, the Intermediate Term Bond Index Fund. I liked its 50% treasury/ 50% corporate bond mix as well as it's lack of MBS.

I really think that the TBM fund is probably going to perform very similar to the one I own and that you are fine owning it in tax advantaged accounts.

stemikger · Post by **stemikger** » Sun May 11, 2014 7:58 am

I own iShares Core Total U.S. Bond Market ETF so I put yes. They do not have the Vanguard Total Bond Index in my 401K, but this is even cheaper.

After I retire, I plan to own the Vanguard Balanced Index Fund and hold that probably until the end, unless my fear glad gets bigger and I may need to get more conservative. In which case, I will held the Vanguard Total Stock Index and Total Bond Index with more in the bond fund.

Aptenodytes · Post by **Aptenodytes** » Sun May 11, 2014 7:58 am

I have a lot of my "bond" allocation in TIAA Traditional and in individual TIPS, so I prefer to concentrate the rest in investment-grade corporate bonds. As a whole what I have I probably approximates the risk profile of total bond, but with higher yield thanks to TIAA.

placeholder · Post by **placeholder** » Sun May 11, 2014 12:31 pm

IlliniDave wrote:I answered yes because of a fund (non-Vanguard) in my 401k that tracks the Barclays Capital US Aggregate Bond Index, and I assume that's what is meant by "Total Bond Market"

That's kind of the question whether the specific Vanguard fund is meant or any very similar fund so I hold 50% the Barclay's CIT in my 401k with the other half stable value.

John3754 · Post by **John3754** » Sun May 11, 2014 12:55 pm

I do not own total bond market. My fixed income allocation is composed of CDs in my Roth, munis in my taxable, and I bonds.

weltschmerz · Post by **weltschmerz** » Sun May 11, 2014 3:18 pm

deleted

baw703916 · Post by **baw703916** » Sun May 11, 2014 3:25 pm

Most of my tax advantaged money is in the TSP, which has the G fund available. No TBM or equivalent for me.

yukonjack · Post by **yukonjack** » Sun May 11, 2014 3:51 pm

Yes. The fixed side of my portfolio is about 80% Vang TBM and 20% Vang TIPS fund.

Munir · Post by **Munir** » Sun May 11, 2014 5:37 pm

The percerntage of respondents who own the Total International Bond Fund are about the same as those who do NOT own the Total Market Bond Fund- mid 30%. I wonder about the overlap. In retrospect, a more interesting poll would have asked how many own each of them and how many own both.

BostonBoy · Post by **BostonBoy** » Sun May 11, 2014 7:34 pm

Yes, I own TBM along with the VG Tips fund.

Clever_Username · Post by **Clever_Username** » Sun May 11, 2014 8:45 pm

Yep, in my rollover (traditional) IRA and also in my 403(b).

occamsrazor · Post by **occamsrazor** » Sun May 11, 2014 9:28 pm

nisiprius wrote:I am very conservative and am in early retirement and am simply stating what we do, it should not be taken as any kind of recommendation or model. The things that I have that are not like stocks and not like cash have a breakdown about like this: 40% Total Bond Market, 40% individual TIPS, and 20% series I savings bonds.

I'm 64, one year from retirement and have adopted a more conservative 70/30 bond/stock allocation.Vanguard Total Bond is my largest holding. I'm interested in your AA.
Do you think Dr. Pfau is right in arguing for less stock early in retirement? Thanks.

Ged · Post by **Ged** » Sun May 11, 2014 10:04 pm

I'm 64 with a 50/50 allocation. Of my fixed income about half is in BND. Since I'm going to be Roth converting and delaying SS over the next 6 years I have a significant shorter term holdings as well.

dewey · Post by **dewey** » Sun May 11, 2014 10:21 pm

I'm 65 in a few weeks, and retired for two years. My AA is 55/45 equities/fixed. Of the fixed portion, roughly 65% is TBM. The rest is mostly intermediate, or in my taxable, tax free intermediate and tax free short term. In my IRS I also hold a chunk of corporates at Uncle Jack's counsel, as well as a small piece of total int'l bond fund ala Vanguard's counsel. As with my equity funds, I'm very tilted to a three fund portfolio overall but I've shaded a few things and for now feel fine with where I am. But I'll add I feel immensely indebted to this forum. Can't say enough about how much I've learned and benefitted from this space.

nedsaid · Post by **nedsaid** » Mon May 12, 2014 8:24 pm

Yes I do own the Vanguard Total Bond Market Index Fund in my workplace savings plan. I have been very pleased to own it.

elgob.bogle · Post by **elgob.bogle** » Mon May 12, 2014 9:03 pm

No - Recently retired, 40/60 liability matching, low, two comma portfolio. Fixed Income: 5% Int Term Munis, 8% individual 5-yr TIPS, 8% Individual 10-yr TIPS, 15% Int Term Treasury Fund, 24% Short Term Treasury Fund - All Fixed income at Vanguard & about 80% of Fixed income in ROTH IRA accounts. Short Term Treasuries to Rebalance and to continue building 10-yr TIPs ladder.

elgob

Dulocracy · Post by **Dulocracy** » Tue May 13, 2014 1:12 pm

Personally, the total bond fund is not for me. While the return may be higher, so is the risk. At present, I am not comfortable with Corporate Bonds. I have an irrational aversion to mortgage backed securities.

My wife has a portion of total bond in her Target Date fund.

LK2012 · Post by **LK2012** » Tue May 13, 2014 1:34 pm

I do have some Vanguard Total Bond in ROTH and just added a little bit more recently. Also have TIAA Traditional and I Bonds.

Jeff7 · Post by **Jeff7** » Tue May 13, 2014 1:37 pm

"Yes...." but then remembered I don't anymore.
I shifted bonds to my 401k, so I can (hopefully) get the stock-based growth in my Roth IRA - pay no taxes on that. I think that works out like that.
So I'm stuck with an American Funds bond fund in the 401k. It's unfortunately more volatile than the Total Bond Fund. It dove in 2008, while the Total Bond Fund dipped only slightly, and it remains ahead.

keystone · Post by **keystone** » Tue May 13, 2014 1:39 pm

It will be interesting to see the final results, my initial thought was that I expected at least 90% of Bogleheads to hold at least some in Total Bond Market. It looks like it will be considerably less than that.

ginmqi · Post by **ginmqi** » Wed May 14, 2014 1:03 am

keystone wrote:It will be interesting to see the final results, my initial thought was that I expected at least 90% of Bogleheads to hold at least some in Total Bond Market. It looks like it will be considerably less than that.

There is a difference between a bond fund and individual bonds, as well as other fixed income assets (CDs, annuities, etc.)

I am still learning about how bonds and the bond market and bond funds work. And so far I am not totally convinced that the increased risk/fees in a bond fund, especially a total market bond fund is the right choice for me.

I want the safest bonds possible, so I am definitely going to rule out total bonds which would include bonds that I do not want to touch with a 10-foot pole....aka corporate and foreign bonds. Bonds and stocks are very different animals and the valuation of them are quite different. I am already risking my money on domestic and foreign equity, so I will be very conservative in the risk-averse sector of my portfolio.

Day9 · Post by **Day9** » Wed May 14, 2014 3:35 am

I do not.

Total Bond Market is not the appropriate bond holding for a young accumulator in his 20's. This person's portfolio might be 90% stock.

The role of bonds in this young accumulator's portfolio is different than their role in an older investor's portfolio. Income isn't as important. During stock market crashes, the role of the 10% bond allocation is not to serve so much as a cushion to dilute the weight of the drop, but more as a hedge that zigs up when stocks crash.

For these reasons I suggest young accumulators with only a 10% or less allocation to bonds should hold only bonds that are the highest quality, non callable, and default free. That's long term US Treasury Bonds, the first and best form of diversification you can get in a stock-dominated (90%+) portfolio.

Johm221122 · Post by **Johm221122** » Wed May 14, 2014 3:45 am

keystone wrote:It will be interesting to see the final results, my initial thought was that I expected at least 90% of Bogleheads to hold at least some in Total Bond Market. It looks like it will be considerably less than that.

A lot of us have to make the best of what we got, Pimco , stable value or other bond funds in 401..I'm sure many got Penn Fed cd's too.
John

Cernel · Post by **Cernel** » Wed May 14, 2014 5:19 am

No Total Bond

Bond allocation is 45% of my total portfolio
15% in Vanguard Intermediate Term Bond Index (VBILX)
15% in Vanguard Intermediate Term Investment Grade (VFIDX)
15% in Vanguard Inflation Protected Securities (VAIPX)

Doc · Post by **Doc** » Wed May 14, 2014 9:52 am

ginmqi wrote:I am still learning about how bonds and the bond market and bond funds work. And so far I am not totally convinced that the increased risk/fees in a bond fund, especially a total market bond fund is the right choice for me.

In Larry Swedroe's bond book "The Only Guide to a Winning Bond Strategy You'll Ever Need: The Way Smart Money Preserves Wealth Today" he makes an argument against Mortgage Backed Securities, long bonds, and to a somewhat lesser extent in my opinion, even intermediate corporates. This is the main reason I model my FI portfolio on the Bar Cap Intermediate (1-10 year) Government/Credit Index instead of TBM.

Day9 wrote:For these reasons I suggest young accumulators with only a 10% or less allocation to bonds should hold only bonds that are the highest quality, non callable, and default free. That's long term US Treasury Bonds, the first and best form of diversification you can get in a stock-dominated (90%+) portfolio.

This is another good alternative for very high equity portfolios.

texasdiver · Post by **texasdiver** » Wed May 14, 2014 12:08 pm

I have it as a component in my and my wife's target retirement funds but not as a stand-alone fund.

I use my TSP-G fund in lieu of total bond for the fixed income portion of the rest of my portfolio.

Bungo · Post by **Bungo** » Wed May 14, 2014 12:20 pm

TBM is 75% of my non-equity holdings. Would be 100% if not for suboptimal 401(k) choices. I use PIMCO for the 401(k) portion.

chaz · Post by **chaz** » Wed May 14, 2014 12:29 pm

Yes, in my IRA.

DaveG · Post by **DaveG** » Wed May 14, 2014 1:00 pm

I answered "yes".

DW and I are both in our late 30's. 20% of our retirement portfolio is in some variation total bond (the ETF "BND", Fidelity Spartan US Bond "FSITX", or DW's 401k's Total Bond fund that has an ER of 0.04%).

Our other bond allocations in our retirement accounts are 5% in "TIP" and 5% in "JNK".

DW also inherited a 403b that yields 4.5% fixed but since she must take RMD's, we exclude it from our "retirement" portfolio.

We also hold municipal bonds in our taxable account in the form of the ETF's MUB and TFI.

111 · Post by **111** » Wed May 14, 2014 1:04 pm

I do, but after reading some of the other comments and some other threads I'm thinking of selling it since I also have a TSP and the ability to shift funds to the G-Fund.

ginmqi · Post by **ginmqi** » Wed May 14, 2014 1:25 pm

Doc wrote:
ginmqi wrote:I am still learning about how bonds and the bond market and bond funds work. And so far I am not totally convinced that the increased risk/fees in a bond fund, especially a total market bond fund is the right choice for me.
In Larry Swedroe's bond book "The Only Guide to a Winning Bond Strategy You'll Ever Need: The Way Smart Money Preserves Wealth Today" he makes an argument against Mortgage Backed Securities, long bonds, and to a somewhat lesser extent in my opinion, even intermediate corporates. This is the main reason I model my FI portfolio on the Bar Cap Intermediate (1-10 year) Government/Credit Index instead of TBM.

I am in the process of procuring this Swedroe book as I continue to learn about how bonds work and how to invest in bonds. I've read Swensen's Unconventional Success (in which he does not recommend any bonds other than Treasuries and TIPS). And I need to do a 2nd read of Thau's The Bond Book.

But yeah seems like to me there is very little point in investing in corporate and foreign and mortgaged backed securities and the such.