Author Topic: Best Bond Funds  (Read 1424 times)

jwilliams0215

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Best Bond Funds
« on: July 21, 2014, 10:11:55 AM »
I'm curious to what you guys view as a good bond fund for a 2-4 year investment horizon. Sticking with the mustachian preferred Vanguard, here is a link of potential investments:

https://investor.vanguard.com/mutual-funds/vanguard-mutual-funds-list?assetclass=bond

I'd think a minimum expected yield of 3% would be necessary or you could just drop the funds into an online savings account and get 1% or close to it.

To minimize risk, I would think a fund with investment grade companies and no more than medium duration would be preferred. In this light the VFICX fits the mold, but only has a yield of 2.52%.

Thoughts on the risk and reward of this account vs. others?

sublime9528

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Re: Best Bond Funds
« Reply #1 on: July 21, 2014, 07:35:25 PM »
Given that in the average effective maturity of that fund is 6.4 years and the average duration is 5.2 years, you may want to consider the VFSTX, which is the short term version of the fund you mentioned.  There's also the VBMFX, which is the total bond index fund, which includes short, medium, and long term bonds.  But that may not be quite what you're looking for. 

milesdividendmd

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Re: Best Bond Funds
« Reply #2 on: July 21, 2014, 10:46:24 PM »
In your situation I would recommend barbelling. Ie combining a big portion of a very safe investment (ie 90 % short term treasuries) with a small allocation of a high risk/ high reward asset (10% small cap value or emerging markets equities. )

See here for several more bond barbells ( great post)

 http://www.bogleheads.org/forum/viewtopic.php?t=73669