I'm curious as to what bond funds (if any) people hold in taxable accounts.
I generally try to follow the 3-fund portfolio model, so for my 401K at Fidelity and my IRA at Vanguard I hold Spartan US Bond Index Advantage Class (FSITX) and Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX).
But I'm in the 28% tax bracket so these fund are inefficient in taxable accounts. I was thinking of investing in either the Vanguard Intermediate-Term Tax-Exempt fund (VWITX) or, since I live in MA, the Vanguard MA Tax-Exempt Fund (VMATX). Returns are a little higher on the latter, but maybe not enough to make up for the narrower diversification.
How do you deal with bonds in taxable accounts?