VBTLX vs. BND
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VBTLX vs. BND
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?
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?
Re: VBTLX vs. BND
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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Re: VBTLX vs. BND
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):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.
http://quotes.morningstar.com/chart/etf ... 2%3A955%7D
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Re: VBTLX vs. BND
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
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Re: VBTLX vs. BND
Thanks all. In addition to not understanding ETFs, it looks like I don't understand how to run Morningstar charts very well either.
Re: VBTLX vs. BND
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.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.
Re: VBTLX vs. BND
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?
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Re: VBTLX vs. BND
Look at yesterday. It was the opposite. They're even when you net the two days.
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BND vs VBTLX Percent Difference Today
Why is BND up 4.22% while VBTLX down -0.53% today?
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Re: BND vs VBTLX Percent Difference Today
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.
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Re: BND vs VBTLX Percent Difference Today
Are you looking at yesterday's closing price for VBTLX by any chance? Day's closing price for mutual funds often gets updated overnight.
Re: VBTLX vs. BND
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.
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.
Re: VBTLX vs. BND
merged keith1660 thread here
Re: VBTLX vs. BND
This is a bumped thread from 5 years ago.
The fool, with all his other faults, has this also - he is always getting ready to live. - Seneca Epistles < c. 65AD
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Re: VBTLX vs. BND
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.
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.
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Re: VBTLX vs. BND
People rebalancing into stocks?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?
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Re: VBTLX vs. BND
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.
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Re: VBTLX vs. BND
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
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Re: VBTLX vs. BND
They should be almost identical. ETF or Mutual Fund. But different daily returns. Strange.
Re: VBTLX vs. BND
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
- asset_chaos
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Re: VBTLX vs. BND
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.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?
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.
Regards, |
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Guy
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Re: VBTLX vs. BND
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.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.