So... What bond fund or bond-like instrument do you use?

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AndroAsc
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So... What bond fund or bond-like instrument do you use?

Post by AndroAsc » Mon Oct 02, 2017 1:05 pm

It's been a while since low interest rates started. And all of our fears of hyperinflation seems to have went up in smoke (I certainly had some during 2008). What funds are you guys using these days, assuming we have no predictive power or whether the future with be deflationary or hyperinflationary.

Vanguard Total Bond Market? Muni Bonds? Stable Value Fund? TIPS Fund? I-Bonds?

I did some quick google, the end dates do vary but last 5-years performance has been
a) 4.0% for SV fund like TIAA traditional, my employer SV fund returned 2.7% over that period.
b) 2.6% for Vanguard Intermediate-term Muni Bonds
c) 1.6% for Vanguard Total Bond
d) -0.1% for Vanguard TIPS fund.
e) For a Jun 2012 i-Bond, the annualized return over 5-years would be about 1.5%.

I will admit that most of my bond holdings are in SV fund these days. I also have some in intermediate-term munis that I did not bother selling, and yes I held through that whole muni is dying craze a while back.
Last edited by AndroAsc on Mon Oct 02, 2017 1:10 pm, edited 1 time in total.

livesoft
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Re: So... What bond fund or bond-like instrument do you use?

Post by livesoft » Mon Oct 02, 2017 1:10 pm

I use the same ol' same ol' and nothing has changed:

Total US Bond in the form of VBTLX, VBMFX, FBIDX, AGG, and BND.

Sometimes I day trade Vanguard Intermediate-term bond fund: BIV

And I have VCSH (Vanguard Short-term corporate bond index fund) and little bit of TIAA Traditional Annuity.

YTD performance is about 3% for the fixed income portion of the portfolio. That's about 1% per quarter and within expectations. And after today, YTD will be nicely higher.

Occasionally I sell a big chunk of bonds and buy an equity ETF like IJS or IWN for a about a week, then go back to bonds.
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remomnyc
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Re: So... What bond fund or bond-like instrument do you use?

Post by remomnyc » Mon Oct 02, 2017 1:33 pm

TIAA Traditional in 403b, VBTLX (Vanguard total bond admiral shares) in IRAs, BND (Vanguard total bond ETF) and brokered CDs (currently Ally and Wells Fargo) in 401k, and Ally 11-mo no-penalty CDs and 5-yr CD in taxable accounts for $$$ that could be used within next 5 years. Boring is good.

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Pranav
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Re: So... What bond fund or bond-like instrument do you use?

Post by Pranav » Mon Oct 02, 2017 1:36 pm

Vanguard Total U.S. Bond Index Fund
Pranav

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Ice-9
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Re: So... What bond fund or bond-like instrument do you use?

Post by Ice-9 » Mon Oct 02, 2017 1:57 pm

My fixed income target allocation is split 50/50 between nominal and inflation-indexed bonds.

The inflation-indexed portion includes:
* FSIYX - Fidelity's TIPS fund
* some individual TIPS
* some I-Bonds purchased back in 2003 when rates were higher

The nominal portion includes:
* Some SSgA Total Bond Market index fund in my workplace plan
* Some CDs in BrokerageLink in my plan, mostly from a few years ago when CDs were easily a better deal than the SEC yield of TBM
* A small amount of 2003 EE Bonds, set to hit double purchase-value in 2020

mega317
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Re: So... What bond fund or bond-like instrument do you use?

Post by mega317 » Mon Oct 02, 2017 2:17 pm

Split between total bond market indexes in tax-advantaged and California munis in taxable. The munis are because I have some expenses coming up and don't have enough of a taxable account to risk it all in equities.

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Re: So... What bond fund or bond-like instrument do you use?

Post by alex_686 » Mon Oct 02, 2017 2:30 pm

I don't fear hyperinflation but do think we could see a increase in inflation. I don't like taking on so much duration risk with so little return.

Vanguard intermediate corporate bond fund is where the bulk of my bonds are. Some in preferred, junk, and EM debt - about 15%. Slight acceleration in paying down my variable rate mortgage - a negative bond.

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Re: So... What bond fund or bond-like instrument do you use?

Post by jebmke » Mon Oct 02, 2017 2:32 pm

Investment grade bond funds,tax exempt bond funds and individual Tips.
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nisiprius
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Re: So... What bond fund or bond-like instrument do you use?

Post by nisiprius » Mon Oct 02, 2017 2:36 pm

About 40% Total Bond, VBTLX.
About 40% Vanguard Inflation-Protected Securities, VAIPX.
About 20% series I savings bonds.

Off to the side are two annuities which can be considered as "illiquid bonds," one from TIAA and one from American General, whose total present value is roughly equal to 15% of my total investment bond holdings.

A biggish chunk of "cash" and some small chunks of short-term bond funds, but I regard those more as being "money market fund substitutes" than "bonds."

Only major change in the past five years was throwing in the towel on individual TIPS issues, liquidating them all, and buying VAIPX. That change involved very little difference in characteristics, as the distribution of individual bonds with respect to maturity was reasonably similar to VAIPX. I made the change for simplification and convenience.
Last edited by nisiprius on Mon Oct 02, 2017 2:39 pm, edited 1 time in total.
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Re: So... What bond fund or bond-like instrument do you use?

Post by mptfan » Mon Oct 02, 2017 2:39 pm

I use Vanguard's high yield corporate bond fund, VWEAX, in a tax deferred IRA.
I eat risk for breakfast. :)

Roothy
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Re: So... What bond fund or bond-like instrument do you use?

Post by Roothy » Mon Oct 02, 2017 2:41 pm

social security, and my house

(OK, and a little bit of Vanguard Total Bond)

mt
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Re: So... What bond fund or bond-like instrument do you use?

Post by mt » Mon Oct 02, 2017 2:54 pm

Mostly 10 year TIPS in tax protected accounts and a much smaller amount of Vanguard Int. Term Tax Exempt Fund in taxable account.

goingup
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Re: So... What bond fund or bond-like instrument do you use?

Post by goingup » Mon Oct 02, 2017 2:56 pm

Bonds and cash are 40% of portfolio
Tax deferred:
Bonds in blended funds: 26%
Total Bond: 10%
Taxable:
Int. Tax Exempt: 35%
Ltd Term TE: 12%
MM and CD: 17%

I'm holding too much cash I know.

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BolderBoy
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Re: So... What bond fund or bond-like instrument do you use?

Post by BolderBoy » Mon Oct 02, 2017 11:13 pm

Directly to the subject line question:

Total Bond Index in retirement accounts (with a bit of TIPS). Intermediate Term Tax-Exempt Bond in non-retirement account.
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Re: So... What bond fund or bond-like instrument do you use?

Post by Sandtrap » Mon Oct 02, 2017 11:23 pm

VBTLX Vanguard Total Bond

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Re: So... What bond fund or bond-like instrument do you use?

Post by curmudgeon » Mon Oct 02, 2017 11:51 pm

I'm just starting to figure it out. I haven't held bonds or FI for probably 20 years, but it's more relevant now that I'm retired, and I took in a big slug of cash from selling a house. For the short term I've paid off a mortgage (negative bond), have a short-term bond fund, and am holding the rest in shortish CDs. If some 3% 5-yr CDs come available again, I may pick some up. I will probably look at more medium-term options in a few months, but I'd like to see how the Fed balance sheet unwind goes for a while first.

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Munir
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Re: So... What bond fund or bond-like instrument do you use?

Post by Munir » Tue Oct 03, 2017 1:06 am

All are in my IRA (I'm an 80 year old retiree) except the I-Bonds & Cash,:

VFIDX- Vanguard Intermediate Investment Grade- 22%

VBILX_ Vanguard Intermediate Bond Index- 18%

VCOBX- Vanguard Core Bond Fund- 12%

VFSUX- Vanguard Short Term Investment Grade- 3%

I-Bonds - 5%
------------------------------------------------------------
VTSAX- Total Stock Market Index- 30%

Cash- 10%

Total 100%

PS: did not include four SPIAs and Social Security

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Portfolio7
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Re: So... What bond fund or bond-like instrument do you use?

Post by Portfolio7 » Tue Oct 03, 2017 1:52 am

We have access to a Stable Value fund. These are bonds in insurance wrappers, designed to create a steady stream of income. Ours (we both worked at the same employer for years) is currently yielding a shade over 3%, and is split between 8 highly rated insurance companies (and did just fine in 2008), so we're invested entirely in the Stable Value for our fixed income allocation for all the investments we control (see pension below). Unless/until the yields get a bit closer (and we're a few more hikes into the Fed's normalization campaign) I expect to remain at this allocation.

I guess I should mention I have a small lump sum pension (it's vested but held until I leave the company or retire) that's 100% in short term treasuries by company policy, which I could complain and ramble about at length, but instead I treat it as part of my FI.

In the past I generally preferred intermediate treasuries, and I'm not averse to mixing in some TBM.
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xxd091
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Re: So... What bond fund or bond-like instrument do you use?

Post by xxd091 » Tue Oct 03, 2017 3:54 am

Hi All
Boglehead from the Uk
Getting old-70+-simplifying life for my wife who has no interest in running Portfolios
My Bond Allocation is one fund only
Vanguard Global Bond Index Fund Hedged Acc GBP(VIGBBP)
Been through 2000 and 2008 crashes-tried and tested!
Let’s me sleep at night!
Equities run the same way
Just sell a chunk as required keeping Asset Allocation right
Ie if Bond Fund is up -sell from it and vice versa if Equities up-or a bit of both if Porfolio in balance
Works for me and I think she will handle it if I leave the stage first!
It’s the Boglehead way!
xxd09

rrppve
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Re: So... What bond fund or bond-like instrument do you use?

Post by rrppve » Tue Oct 03, 2017 4:12 am

I have nothing in total bond.
Use a combination of 10 year TIPS bought at auction, 3% CDs bought whenever a special is available and stable value at 2.3%
Demand money is 1.2 - 1.6% depending on where it is held.
Kids 529s have 2.59% stable value through Colorado 529.

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Re: So... What bond fund or bond-like instrument do you use?

Post by oldcomputerguy » Tue Oct 03, 2017 4:52 am

My IRA is at Fidelity. I'm holding FSITX Fidelity U.S. Bond Index Fund, which benchmarks Barclay's Aggregate index. DW has her 401k with Schwab. It's composed of UITs, she's holding a mix of funds there including a bond component that tracks Barclay's Aggregate.

In short, all our bond holdings are basically U.S. total bond funds. I'm newly retired, and she has another couple of years to go, our AA is roughly 50/50 at this point, probably transitioning to 40/60 after she punches out, with perhaps a dash of TIPS for inflation protection.
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Re: So... What bond fund or bond-like instrument do you use?

Post by AlohaJoe » Tue Oct 03, 2017 5:20 am

AndroAsc wrote:
Mon Oct 02, 2017 1:05 pm
What funds are you guys using these days
I have some in Emerging Markets Government Bond, some in Intermediate-Term Tax Exempt, some in High-Yield Corporate Debt, and some in term deposits that currently give me 7.1% for a 12-month term.

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Re: So... What bond fund or bond-like instrument do you use?

Post by z3r0c00l » Tue Oct 03, 2017 6:34 am

Including emergency fund, 50% iBonds and 50% Vanguard total bond and a similar in the 401K. Not super concerned about past performance, expect both to about break even after inflation rather than trying to tweak some profit out of them. These investments help make investing in stocks palatable.

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Re: So... What bond fund or bond-like instrument do you use?

Post by BHUser27 » Tue Oct 03, 2017 6:43 am

Non-equities are a mix of Stable Value in 401k, Vanguard Intermediate Tax Exempt (VWIUX) in taxable, and a few 5-yr CDs

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avenger
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Re: So... What bond fund or bond-like instrument do you use?

Post by avenger » Tue Oct 03, 2017 2:19 pm

All controllable fixed income is in a stable value fund in my 457. I’ll be running out of room shortly if we don’t buy a new house. In that case I’ll put it into intermediate term tax exempt in my non-retirement account.
cheers ... -Mark | "Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau | [3 fund portfolio: VTI, VXUS, SV fund (yield 3.01%)]

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Earl Lemongrab
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Re: So... What bond fund or bond-like instrument do you use?

Post by Earl Lemongrab » Tue Oct 03, 2017 3:25 pm

50/50 bond index fund and stable-value in the 401(k).
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Hiwatter
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Re: So... What bond fund or bond-like instrument do you use?

Post by Hiwatter » Wed Oct 04, 2017 2:50 pm

Fidelity U.S. Bond Index (FSITX) is the only bond fund I hold (all in my Traditional IRA).... from what I understand its very similar to Vanguards Total Bond Fund (BND or VBTLX)

pollifax
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Re: So... What bond fund or bond-like instrument do you use?

Post by pollifax » Wed Oct 04, 2017 4:34 pm

FSITX (Fidelity US Bond Fund) in our 401k.

Suman
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Re: So... What bond fund or bond-like instrument do you use?

Post by Suman » Wed Oct 04, 2017 7:18 pm

FXSTX Fidelity total US bond market institutional from my old employer's 403b and 457b. I rebalance from target fund VITLX to FXSTX to keep my bond allocation at 20%. When no more tax advantaged space left in 403b, will buy BND in my backdoor Roth. When that's full, will switch to Vanguard intermediate term tax-exempt bond fund in taxable account.

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dratkinson
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Re: So... What bond fund or bond-like instrument do you use?

Post by dratkinson » Wed Oct 04, 2017 7:31 pm

All my bonds are in taxable. Small orphaned rIRA is play money in equities.

Checking/savings (low interest), VMSXX (TE mmkt, check writing backup), 1st tier EFs, 1yr living expenses.
VWIUX (IT national muni, fed tax benefit), 3yrs last tier of formal EFs, home projects, new car, dry powder.
VWLUX (LT national muni, fed tax benefit), major bond investment split equally with
WTCOX (CO single-state muni, fed/state tax benefits).

To simplify life in advance of mental decline in old age. Eliminated CDs (taxable, lower yield, early withdrawal penalty, rollover-rate-chasing game, additional accounts to manage) and savings bonds/TD (lower state tax benefit, lower yield, tax-refund game to partially circumvent annual contribution limit, additional account to manage) as being less beneficial and more trouble to manage than muni funds.

SS (delayed).
Home (reverse mortgage, if needed).
Last edited by dratkinson on Sat Oct 07, 2017 8:28 pm, edited 3 times in total.
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The Casualty
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Re: So... What bond fund or bond-like instrument do you use?

Post by The Casualty » Wed Oct 04, 2017 7:39 pm

IRA #1

FTBFX (Fidelity Total Bond Fund)
PIMIX (Pimco Income Fund)
PTTRX (Pimco Total Return Fund)

IRA #2

VWENX (Vanguard Wellington Admiral)

Taxable

VWIAX (Wellesley Admiral)
VTINX (Vanguard Target Retirement)
VFIJX (Vanguard GNMA Admiral)

marklar13
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Re: So... What bond fund or bond-like instrument do you use?

Post by marklar13 » Wed Oct 04, 2017 8:09 pm

Vanguard Total Bond in both of our 401ks.
I-Bonds make up ~60% of our emergency fund.
No bonds in Roth or taxable (other than the I-bonds).

... and about $500 of paper EE bonds I just found in a filing cabinet.

ThrustVectoring
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Re: So... What bond fund or bond-like instrument do you use?

Post by ThrustVectoring » Thu Oct 05, 2017 1:40 am

I'm personally in high-yield savings for money I think I'll probably touch in the short-term and 100% equities outside of that. I'll re-evaluate when I've hit half of my retirement "number" or so.

scrabbler1
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Re: So... What bond fund or bond-like instrument do you use?

Post by scrabbler1 » Thu Oct 05, 2017 7:02 am

I use the monthly dividend from Fidelity Focused High Income Fund (FHIFX) to cover my expenses in my (early) retirement for the last 9 years. I have an IRA which has about half in Fidelity Intermediate-term bond fund (FTHRX). I have smaller amounts in two muni bond funds which act as emergency funds to cover larger, unforeseen expenses. One, with Dreyfus, has checkwriting privileges. The other, with Fidelity, no longer has that feature.

retiredjg
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Re: So... What bond fund or bond-like instrument do you use?

Post by retiredjg » Thu Oct 05, 2017 7:35 am

Mostly Total Bond Market Index, a good chunk of G Fund in the TSP, and a bit of Vanguard Intermediate Term Investment Grade (for more corporate bonds).

Dandy
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Re: So... What bond fund or bond-like instrument do you use?

Post by Dandy » Thu Oct 05, 2017 12:48 pm

1. VG Brokerage CD Ladder
2. Inflation Protected Securities
3. Short Term Bond Index
4. Short Term Investment Grade
5. Intermediate Treasury
6. Intermediate Tax Free
7. Ltd Term Tax Exempt
8. the Fixed income portion of Balanced Index and Wellesley Income
9. Legacy EE bonds
10. Online Savings and Money Market Deposit accounts

Broken Man 1999
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Re: So... What bond fund or bond-like instrument do you use?

Post by Broken Man 1999 » Thu Oct 05, 2017 1:11 pm

At the present I use Total Bond, Short Term Treasury fund, Intermediate Term Treasury fund, Series I and EE US Savings Bonds.

I am in the process of changing all positions in Vanguard Mutual Funds to Vanguard ETFs.

When Vanguard offers the "Total Corporate Bond" ETF (The ETF comprised of three existing Vanguard ETFs) I will change some bond holdings to the new "Total Corporate Bond", and end up with Total Bond ETF, Total Corporate Bond ETF, and Short Tem Govt. ETF, plus the savings bonds.

Broken Man 1999
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spdoublebass
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Re: So... What bond fund or bond-like instrument do you use?

Post by spdoublebass » Thu Oct 05, 2017 5:15 pm

Broken Man 1999 wrote:
Thu Oct 05, 2017 1:11 pm

I am in the process of changing all positions in Vanguard Mutual Funds to Vanguard ETFs.
For learning purposes only... may I ask a question?

I too use ETF's. However, I was reading on this forum the other day about the differences between ETF and mutual funds regarding Bonds. There are a few posts regarding the difference in trading between the two (Friction, NAV, ETC.). I'm just curious why you are going with the ETF's over the Mutual Funds. Expense Ratio's?

Thanks.
Resist much, obey little.

Broken Man 1999
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Re: So... What bond fund or bond-like instrument do you use?

Post by Broken Man 1999 » Thu Oct 05, 2017 6:36 pm

spdoublebass wrote:
Thu Oct 05, 2017 5:15 pm
Broken Man 1999 wrote:
Thu Oct 05, 2017 1:11 pm

I am in the process of changing all positions in Vanguard Mutual Funds to Vanguard ETFs.
For learning purposes only... may I ask a question?

I too use ETF's. However, I was reading on this forum the other day about the differences between ETF and mutual funds regarding Bonds. There are a few posts regarding the difference in trading between the two (Friction, NAV, ETC.). I'm just curious why you are going with the ETF's over the Mutual Funds. Expense Ratio's?

Thanks.
Actually the expense ratios are the same I believe as Admiral share funds, which is what I have.

I like selling at a known price, though, in reality I buy and sell very infrequently. But, I like to know immediately, or nearly so what I paid, or what I received.

Second, though very unlikely, if I ever desire to leave Vanguard, having ETFs might be easier. No plans to do so, but one never knows.

Bottom line, these activities are simply preferences, and add nothing to any debate between mutual funds and ETFs. IOW, my reasons are not grounded in finances.

Broken Man 1999
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Re: So... What bond fund or bond-like instrument do you use?

Post by jimishooch » Fri Oct 06, 2017 12:22 pm

brokerage 5 year CD ladder.
5 year muni bond ladder.
Ibonds.
high yield savings.

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zaplunken
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Re: So... What bond fund or bond-like instrument do you use?

Post by zaplunken » Sat Oct 07, 2017 7:00 pm

I kept a chunk of money in my 401k for the SV fund, last time I looked it was around 2.2 or 2.3%. I'm 50/50 (more like 52/48) and have 32% in the SV fund, 12% in Vang Short Term Investment Grade fund and about 5% in cash.

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Re: So... What bond fund or bond-like instrument do you use?

Post by honduranhurricane » Sun Oct 08, 2017 1:04 am

LSFYX (bank loan fund) is by far my largest fixed income exposure. I also have some exposure to a TIPS and am considering a Mass muni fund from Fido in my taxable account.

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Re: So... What bond fund or bond-like instrument do you use?

Post by Longtermgrowth » Sun Oct 08, 2017 1:30 am

Due to being at the low end of the interest rate spectrum, and personally not seeing the possibility of rates going negative in the near future, but slightly rising over the coming years, I have 100% of fixed income in 5 year CD's instead of bond funds.

MrLogic
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Re: So... What bond fund or bond-like instrument do you use?

Post by MrLogic » Sun Oct 08, 2017 2:02 am

All of tax deferred, ~20% of bond portfolio is in VBTLX or equivalent

Remaining taxable portion, is in Vanguard Inter-Term Tax Exmpt

Craig B
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Re: So... What bond fund or bond-like instrument do you use?

Post by Craig B » Sun Oct 08, 2017 10:07 am

Bonds are 25% of my total portfolio broken down as follows:

I Bonds 12.5%
VTAPX 12.5%
10 year US Bond/CD Ladder 25%
VSBSX 25%
VTABX 25%

columbia
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Re: So... What bond fund or bond-like instrument do you use?

Post by columbia » Sun Oct 08, 2017 10:17 am

Only TIAA Traditional RC, which is paying 4.25% right now. Technically, I could put new money inTBM, if that starts to outperform TIAA. Had anyone here faced that scenario?

student
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Re: So... What bond fund or bond-like instrument do you use?

Post by student » Sun Oct 08, 2017 11:12 am

I hold TIAA Traditional for almost my entire fixed income allocation.

MnD
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Re: So... What bond fund or bond-like instrument do you use?

Post by MnD » Sun Oct 08, 2017 11:24 am

At risk of getting my Boglehead Card suspended, I don't buy into market cap indexing for fixed income.
Investing the most in the biggest debtors at any level (country, corporation, agency, state or other municipality etc.) just doesn't resonate.

I'm 75% TSP G fund (stable value) and 25% Dodge and Cox Global Bond Fund.
Blended effective duration < 1 year (~10 months)
Blended yield 2.55%.
After retirement and a 401K rollover we'll probably be 66%/34%.

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