Which Corp Bond Fund?

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galeno
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Joined: Fri Dec 21, 2007 12:06 pm

Which Corp Bond Fund?

Post by galeno » Wed May 20, 2020 1:44 pm

As of 29 April 2020. ER = 0.09% and Credit = A- for both.

VDUC: YTM = 2.0%. Duration = 1.9 yr.

VDCP: YTM = 2.7%. Duration = 7.8 yr.

We've owned CP for many years. UC is a newer ETF. I've been watching it for a while.

If we switch CP for UC we reduce YTM by 26%. And we reduce duration by 76%.

Our current FI duration = 6.4 yr. With the change it drops to 4.2yr.
Last edited by galeno on Wed May 20, 2020 2:09 pm, edited 1 time in total.
USA-NRA. TER = 0.40%. Expected real CAGR = 2.00%. AWR = 4.00%.: Port: 50% World Stocks + 15% TIPS + 15% Corps + 15% US Treas + 5% CASH.

Rosales
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Joined: Thu Apr 30, 2020 8:43 pm

Re: Which Corp Bond Fund?

Post by Rosales » Wed May 20, 2020 1:52 pm

Probably wise switching to UC for retired portfolio. Less volatility.

Valuethinker
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Joined: Fri May 11, 2007 11:07 am

Re: Which Corp Bond Fund?

Post by Valuethinker » Thu May 21, 2020 3:51 am

galeno wrote:
Wed May 20, 2020 1:44 pm
As of 29 April 2020. ER = 0.09% and Credit = A- for both.

VDUC: YTM = 2.0%. Duration = 1.9 yr.

VDCP: YTM = 2.7%. Duration = 7.8 yr.

We've owned CP for many years. UC is a newer ETF. I've been watching it for a while.

If we switch CP for UC we reduce YTM by 26%. And we reduce duration by 76%.

Our current FI duration = 6.4 yr. With the change it drops to 4.2yr.
Personally I would switch WXYZ for ZYWX.

And don't forget VTI.

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oldcomputerguy
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Re: Which Corp Bond Fund?

Post by oldcomputerguy » Thu May 21, 2020 5:40 am

For the record:
galeno wrote:
Wed May 20, 2020 1:44 pm
VDUC: YTM = 2.0%. Duration = 1.9 yr. -- Vanguard USD Corporate 1-3 Year Bond UCITS ETF (USD) Distributing

VDCP: YTM = 2.7%. Duration = 7.8 yr. -- Vanguard USD Corporate Bond UCITS ETF (USD) Distributing
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

Valuethinker
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Joined: Fri May 11, 2007 11:07 am

Re: Which Corp Bond Fund?

Post by Valuethinker » Fri May 22, 2020 3:00 am

oldcomputerguy wrote:
Thu May 21, 2020 5:40 am
For the record:
galeno wrote:
Wed May 20, 2020 1:44 pm
VDUC: YTM = 2.0%. Duration = 1.9 yr. -- Vanguard USD Corporate 1-3 Year Bond UCITS ETF (USD) Distributing

VDCP: YTM = 2.7%. Duration = 7.8 yr. -- Vanguard USD Corporate Bond UCITS ETF (USD) Distributing
thank you. In fact, and this is a message to the Original Poster, if one does not post the link to the fund description, one really cannot expect any informed comment. I am certainly not going to take the time to answer basic questions like "corporate what"? Credit rating of the bonds in the fund. National exposure, etc.

I have no idea whether these funds hold only the bonds of US companies, or international companies that happen to borrow in USDs. Or whether it achieves its USD exposure via currency hedging?

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