VBTLX vs. BND

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CantPassAgain
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VBTLX vs. BND

Post by CantPassAgain »

I noticed VBTLX (Vanguard Total Bond Market Admiral Shares) was up 0.18% today while BND (Vanguard Total Bond Market ETF) was down 0.14%.

One of the reasons I am sort of hesitant to keep adding to ETFs is that I just don't understand them very well. I know mutual funds are valued based on their underlying holdings, but I'm not sure how this is supposed to work with ETFs, since they trade throughout the day like stocks. I understand that an ETF is really just a share class of a certain fund and they both own the same thing, but if they are valued differently and move independently of one another, I would think this is a pretty significant difference and kind of a big deal.

I know I have this wrong somewhere...anyone care to try and shed some light?
livesoft
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Re: VBTLX vs. BND

Post by livesoft »

I didn't look yet, but it is possible that BND was up last Friday while VBLTX was down, so you have to look at the starting point as well. The other difference has to do with accrual of monthly dividends or not.
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Topic Author
CantPassAgain
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Re: VBTLX vs. BND

Post by CantPassAgain »

livesoft wrote:I didn't look yet, but it is possible that BND was up last Friday while VBLTX was down, so you have to look at the starting point as well. The other difference has to do with accrual of monthly dividends or not.
It makes sense that there would be some small timing differences, but when I compare in Morningstar there seems to be a measurable, persistent difference (I've tried to post the chart image here but haven't yet been able to figure out how to do that):

http://quotes.morningstar.com/chart/etf ... 2%3A955%7D
mosu
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Re: VBTLX vs. BND

Post by mosu »

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Last edited by mosu on Thu Mar 12, 2015 9:11 pm, edited 1 time in total.
beammeupscotty
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Re: VBTLX vs. BND

Post by beammeupscotty »

Image

https://tinyurl.com/o8arpy7

The day-to-day difference has to do with market price vs. NAV (premium/discount) of the ETF (the mutual fund is always at NAV).

https://personal.vanguard.com/us/funds/ ... IntExt=INT
Topic Author
CantPassAgain
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Re: VBTLX vs. BND

Post by CantPassAgain »

Thanks all. In addition to not understanding ETFs, it looks like I don't understand how to run Morningstar charts very well either.
livesoft
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Re: VBTLX vs. BND

Post by livesoft »

Strevlac wrote:Thanks all. In addition to not understanding ETFs, it looks like I don't understand how to run Morningstar charts very well either.
Just be sure to quote/chart a mutual fund ticker first before doing any charting or comparing with ETFs. M* by default does "price of" ETFs and not "growth of" ETFs.
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Carl53
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Re: VBTLX vs. BND

Post by Carl53 »

Pretty big discrepancy today. VBTLX is down 0.53% with BND up 4.22% today. I know that there is a difference in NAV and Market Price, but if one bought at the close of yesterday and sold at the close today would not you have been nearly 5% better with BND?
Triple digit golfer
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Re: VBTLX vs. BND

Post by Triple digit golfer »

Carl53 wrote: Fri Mar 13, 2020 6:15 pm Pretty big discrepancy today. VBTLX is down 0.53% with BND up 4.22% today. I know that there is a difference in NAV and Market Price, but if one bought at the close of yesterday and sold at the close today would not you have been nearly 5% better with BND?
Look at yesterday. It was the opposite. They're even when you net the two days.
brainstorming
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BND vs VBTLX Percent Difference Today

Post by brainstorming »

Why is BND up 4.22% while VBTLX down -0.53% today?
Triple digit golfer
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Re: BND vs VBTLX Percent Difference Today

Post by Triple digit golfer »

Look at yesterday. It was the opposite. They're even when you net the two days. Something to do with liquidity. It's above my pay grade, frankly.
Hyperchicken
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Re: BND vs VBTLX Percent Difference Today

Post by Hyperchicken »

Are you looking at yesterday's closing price for VBTLX by any chance? Day's closing price for mutual funds often gets updated overnight.
rerod
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Re: VBTLX vs. BND

Post by rerod »

Call me a timer if you like, but I sold all of my VBTLX 03/09/2020 at $11.62 after reading "The 40 year secular bond bull market is over!" and watching the melt up.

I lucked out, considering I used it as a savings account for the house I want to build soon, and wont be buying any more with the low yields and high price.

Consider what will happen to bonds when the fed finally starts raising rates.
mighty72
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Re: VBTLX vs. BND

Post by mighty72 »

merged keith1660 thread here
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Candor
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Re: VBTLX vs. BND

Post by Candor »

mighty72 wrote: Fri Mar 13, 2020 7:14 pm merged keith1660 thread here

This is a bumped thread from 5 years ago.
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birnhamwood
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Re: VBTLX vs. BND

Post by birnhamwood »

I have always thought the Vanguard Total Bond Index Fund (Admiral shares) to be one of the safest possible mutual fund bets. Have I been wrong all these years?

Balance March 6, 2020 $621,929,000

Balance March 13, 2020 $600,539,000

What happened?

Where can I immediately move this total amount to a safer place?

Thank you.
Last edited by birnhamwood on Fri Mar 13, 2020 8:36 pm, edited 1 time in total.
Hyperchicken
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Re: VBTLX vs. BND

Post by Hyperchicken »

birnhamwood wrote: Fri Mar 13, 2020 8:31 pm I have always thought the Vanguard Total Bond Index Fund (Admiral shares) to be one of the safest possible mutual fund bets. Have I been wrong all these years?

Balance March 6, 2020 $621,929,000

Balance March 13, 2020 $600,539,000

What happened?
People rebalancing into stocks?
averagedude
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Re: VBTLX vs. BND

Post by averagedude »

Absolutely nothing wrong with the total bond index. When there is a flock to safety, treasuries usually win the day, but having some corporate bonds in the mix for a long term investor, should generate excess returns over the long term. You can't judge a book by it cover, and you can't judge an asset class by it's short term investment performance.
pasadena
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Re: BND vs VBTLX Percent Difference Today

Post by pasadena »

keith1660 wrote: Fri Mar 13, 2020 6:23 pm Why is BND up 4.22% while VBTLX down -0.53% today?
Doesn't make sense to me either. Vanguard has updated their website, so this is today's price. Fidelity's FXNAX is also down.
Hyperchicken
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Re: VBTLX vs. BND

Post by Hyperchicken »

Interesting indeed. From Vanguard's page on BND:
  • Market price as of 03/13/2020: $83.95 $3.13 3.87%
  • NAV as of 03/13/2020: $85.17 -$0.44 -0.51%
  • Premium/Discount: -$4.79
brainstorming
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Re: VBTLX vs. BND

Post by brainstorming »

They should be almost identical. ETF or Mutual Fund. But different daily returns. Strange.
pasadena
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Re: VBTLX vs. BND

Post by pasadena »

Yes, I've always expected them to be within a few .01% of each other. But this is a 4.75% gap, that's huge :confused
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asset_chaos
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Re: VBTLX vs. BND

Post by asset_chaos »

birnhamwood wrote: Fri Mar 13, 2020 8:31 pm I have always thought the Vanguard Total Bond Index Fund (Admiral shares) to be one of the safest possible mutual fund bets. Have I been wrong all these years?
...

Where can I immediately move this total amount to a safer place?
Yes, you've been wrong all these years if you thought total bond fund never went down. While total bond is much, much safer than stocks, total bond has term and credit risk; it can and has lost money before; it will continue to do so occasionally.

The safest bond fund would have only short term treasury bonds. Look up Vanguard's short term treasury fund, 100% treasury bonds, one third the duration of total bond. Naturally it also has half the yield of total bond. But you might want to first plot out on M* the comparison of how they both did in 2008 and lately with, say, total stock market fund.
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Cheez-It Guy
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Re: VBTLX vs. BND

Post by Cheez-It Guy »

birnhamwood wrote: Fri Mar 13, 2020 8:31 pm I have always thought the Vanguard Total Bond Index Fund (Admiral shares) to be one of the safest possible mutual fund bets. Have I been wrong all these years?

Balance March 6, 2020 $621,929,000

Balance March 13, 2020 $600,539,000

What happened?

Where can I immediately move this total amount to a safer place?

Thank you.
Check balance January 1, 2020. It's not a one-way ticket up. You could argue that the increase prior to recent downturn was the greater anomaly.
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