The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: KTG on May 08, 2018, 06:48:01 AM
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I have some money in BND, but I was wondering if I should be thinking of another place to put some cash I might one day need in an emergency fund. Since BND does have a mix of long term bonds, which are taking a hit right now, the ETF share price has been going on a slow decline. I want to find something that is more stable and probably uses more short term bonds. Any recommendations?
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You should take a look at tax-exempt bond funds, in case the yield is better for your tax bracket. Even if you checked in 2017 - the tax brackets are different for 2018.
I weigh bond funds by yield divided by duration. It's not entirely fair, but it's a rough way of weighing term risk and yield. You also need to take a look at the bond quality, since junk bonds ("high yield") get additional yield by taking a much higher risk of default.
What about BSV (Vanguard Short-term bond ETF)? It has a 0.07% expense ratio, 2.7 year duration, and 2.71% (taxable) yield. Most of the bonds are government grade (63%) but there's 25% hovering in investment grade (A & BBB).
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Yeah def no junk bonds or anything like that. I will look into your other suggestions, thanks!
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I have about half BND, half BSV.
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I have some money in BND, but I was wondering if I should be thinking of another place to put some cash I might one day need in an emergency fund. Since BND does have a mix of long term bonds, which are taking a hit right now, the ETF share price has been going on a slow decline. I want to find something that is more stable and probably uses more short term bonds. Any recommendations?
Are you taking dividends into account?