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

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Topic Author
AndroAsc
Posts: 1240
Joined: Sat Nov 21, 2009 6:39 am

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

Post by AndroAsc »

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
Posts: 86070
Joined: Thu Mar 01, 2007 7:00 pm

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

Post by livesoft »

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.
Wiki This signature message sponsored by sscritic: Learn to fish.
remomnyc
Posts: 1055
Joined: Mon Jan 04, 2016 3:27 pm

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

Post by remomnyc »

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.
User avatar
Pranav
Posts: 237
Joined: Thu Aug 25, 2016 11:25 am

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

Post by Pranav »

Vanguard Total U.S. Bond Index Fund
https://www.bogleheads.org/wiki
User avatar
Ice-9
Posts: 1579
Joined: Wed Oct 15, 2008 12:40 pm
Location: MD

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

Post by Ice-9 »

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
Posts: 5705
Joined: Tue Apr 19, 2016 10:55 am

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

Post by mega317 »

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.
alex_686
Posts: 13319
Joined: Mon Feb 09, 2015 1:39 pm

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

Post by alex_686 »

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.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
jebmke
Posts: 25449
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

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

Post by jebmke »

Investment grade bond funds,tax exempt bond funds and individual Tips.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
User avatar
nisiprius
Advisory Board
Posts: 52192
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

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

Post by nisiprius »

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.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
mptfan
Posts: 7217
Joined: Mon Mar 05, 2007 8:58 am

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

Post by mptfan »

I use Vanguard's high yield corporate bond fund, VWEAX, in a tax deferred IRA.
Roothy
Posts: 145
Joined: Wed Aug 26, 2015 9:20 am

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

Post by Roothy »

social security, and my house

(OK, and a little bit of Vanguard Total Bond)
mt
Posts: 150
Joined: Sun Dec 26, 2010 10:25 am

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

Post by mt »

Mostly 10 year TIPS in tax protected accounts and a much smaller amount of Vanguard Int. Term Tax Exempt Fund in taxable account.
User avatar
goingup
Posts: 4910
Joined: Tue Jan 26, 2010 12:02 pm

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

Post by goingup »

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.
User avatar
BolderBoy
Posts: 6750
Joined: Wed Apr 07, 2010 12:16 pm
Location: Colorado

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

Post by BolderBoy »

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.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
User avatar
Sandtrap
Posts: 19590
Joined: Sat Nov 26, 2016 5:32 pm
Location: Hawaii No Ka Oi - white sandy beaches, N. Arizona 1 mile high.

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

Post by Sandtrap »

VBTLX Vanguard Total Bond
Wiki Bogleheads Wiki: Everything You Need to Know
curmudgeon
Posts: 2630
Joined: Thu Jun 20, 2013 11:00 pm

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

Post by curmudgeon »

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.
User avatar
Munir
Posts: 3200
Joined: Mon Feb 26, 2007 3:39 pm
Location: Oregon

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

Post by Munir »

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
User avatar
Portfolio7
Posts: 1128
Joined: Tue Aug 02, 2016 3:53 am

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

Post by Portfolio7 »

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.
"An investment in knowledge pays the best interest" - Benjamin Franklin
xxd091
Posts: 492
Joined: Sun Aug 21, 2011 4:41 am
Location: UK

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

Post by xxd091 »

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
SpaceCowboy
Posts: 1006
Joined: Sun Aug 12, 2012 12:35 am

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

Post by SpaceCowboy »

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.
User avatar
oldcomputerguy
Moderator
Posts: 17920
Joined: Sun Nov 22, 2015 5:50 am
Location: Tennessee

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

Post by oldcomputerguy »

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.
There is only one success - to be able to spend your life in your own way. (Christopher Morley)
AlohaJoe
Posts: 6609
Joined: Mon Nov 26, 2007 1:00 pm
Location: Saigon, Vietnam

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

Post by AlohaJoe »

AndroAsc wrote: Mon Oct 02, 2017 1:05 pmWhat 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.
z3r0c00l
Posts: 3804
Joined: Fri Jul 06, 2012 11:43 am
Location: NYC

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

Post by z3r0c00l »

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.
70% Global Stocks / 30% Bonds
BHUser27
Posts: 655
Joined: Mon Jan 18, 2016 2:07 pm
Location: A Midwestern Town

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

Post by BHUser27 »

Non-equities are a mix of Stable Value in 401k, Vanguard Intermediate Tax Exempt (VWIUX) in taxable, and a few 5-yr CDs
User avatar
avenger
Posts: 963
Joined: Mon Dec 02, 2013 11:11 am

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

Post by avenger »

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 | [VTI, VXUS, BND, VTEB, SV fund]
User avatar
Earl Lemongrab
Posts: 7270
Joined: Tue Jun 10, 2014 1:14 am

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

Post by Earl Lemongrab »

50/50 bond index fund and stable-value in the 401(k).
User avatar
Hiwatter
Posts: 120
Joined: Tue Aug 16, 2016 3:43 pm

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

Post by Hiwatter »

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
Posts: 26
Joined: Tue Sep 12, 2017 4:05 pm

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

Post by pollifax »

FSITX (Fidelity US Bond Fund) in our 401k.
Suman
Posts: 89
Joined: Sun Jan 01, 2017 12:59 pm

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

Post by Suman »

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.
User avatar
dratkinson
Posts: 6115
Joined: Thu Jul 26, 2007 6:23 pm
Location: Centennial CO

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

Post by dratkinson »

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.
d.r.a., not dr.a. | I'm a novice investor; you are forewarned.
The Casualty
Posts: 142
Joined: Sun Oct 24, 2010 9:09 pm

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

Post by The Casualty »

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
Posts: 141
Joined: Wed Jul 08, 2015 11:47 am

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

Post by marklar13 »

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
Posts: 771
Joined: Wed Jul 12, 2017 2:51 pm

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

Post by ThrustVectoring »

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.
Current portfolio: 60% VTI / 40% VXUS
scrabbler1
Posts: 2798
Joined: Fri Nov 20, 2009 1:39 pm

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

Post by scrabbler1 »

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.
User avatar
retiredjg
Posts: 54077
Joined: Thu Jan 10, 2008 11:56 am

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

Post by retiredjg »

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
Posts: 6701
Joined: Sun Apr 25, 2010 7:42 pm

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

Post by Dandy »

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
Posts: 8625
Joined: Wed Apr 08, 2015 11:31 am
Location: West coast of Florida, near Champa Bay !

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

Post by Broken Man 1999 »

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
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
User avatar
spdoublebass
Posts: 889
Joined: Thu Apr 27, 2017 10:04 pm
Location: NY

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

Post by spdoublebass »

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.
I'm trying to think, but nothing happens
Broken Man 1999
Posts: 8625
Joined: Wed Apr 08, 2015 11:31 am
Location: West coast of Florida, near Champa Bay !

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

Post by Broken Man 1999 »

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
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
jimishooch
Posts: 280
Joined: Tue Nov 11, 2014 1:28 pm

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

Post by jimishooch »

brokerage 5 year CD ladder.
5 year muni bond ladder.
Ibonds.
high yield savings.
User avatar
zaplunken
Posts: 1368
Joined: Tue Jul 01, 2008 9:07 am

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

Post by zaplunken »

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.
honduranhurricane
Posts: 173
Joined: Tue Oct 18, 2016 10:18 pm
Location: boston, ma

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

Post by honduranhurricane »

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.
Longtermgrowth
Posts: 731
Joined: Thu Nov 26, 2015 12:59 pm

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

Post by Longtermgrowth »

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
Posts: 5
Joined: Sun Sep 24, 2017 10:58 am

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

Post by MrLogic »

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
Posts: 11
Joined: Thu Feb 09, 2017 7:07 pm

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

Post by Craig B »

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
Posts: 3023
Joined: Tue Aug 27, 2013 5:30 am

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

Post by columbia »

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
Posts: 10757
Joined: Fri Apr 03, 2015 6:58 am

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

Post by student »

I hold TIAA Traditional for almost my entire fixed income allocation.
MnD
Posts: 5193
Joined: Mon Jan 14, 2008 11:41 am

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

Post by MnD »

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%.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
TreadLightly
Posts: 140
Joined: Mon Mar 19, 2018 2:30 pm

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

Post by TreadLightly »

AndroAsc wrote: 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%.
Could someone please help me understand why we should invest in bond funds when the yields are so low, especially the index funds? Are the coupon payments not included in this? I am embarrassingly thick headed with bonds. I've found this thread trying to understand them, but I don't understand with yields like quoted above, why they're worth buying. Someone please help explain what I obviously don't get!
User avatar
triceratop
Posts: 5838
Joined: Tue Aug 04, 2015 8:20 pm
Location: la la land

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

Post by triceratop »

I only have bonds in a taxable account. I use an Intermediate treasury ETF (Vanguard's).
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."
Post Reply