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Learning, Sharing, and Teaching => Investor Alley => Topic started by: jpdx on June 24, 2019, 12:53:56 AM

Title: Total Bond Market vs Intermediate-Term
Post by: jpdx on June 24, 2019, 12:53:56 AM

Hello, smart people. I hold equal amounts of VBTLX and VBILX in my retirement accounts. For more simplicity, I'm thinking of moving all bonds to Total Bond Market. I appreciate that neither of us can predict the future, but what do you think should I do?

Title: Re: Total Bond Market vs Intermediate-Term
Post by: AdrianC on June 24, 2019, 08:08:39 AM

Quote from: jpdx on June 24, 2019, 12:53:56 AM

I appreciate that neither of us can predict the future, but what do you think should I do?

There you go...can't predict the future, so own them all.

Title: Re: Total Bond Market vs Intermediate-Term
Post by: Radagast on June 26, 2019, 09:23:26 PM

Intermediate funds will eek out some small extra capital gains in a normally sloped yield curve, which lets say happens about 1/2 the time. They will break even if the yield curve is flat (return only their coupon yield), which lets say occurs 1/4 the time. They will do worse 1/4 the time when that portion of the yield curve inverts. So in general it seems like IT would do a little better, but total bond market funds are remarkably stable relative to their yield and duration.

Put 6 in one of them, one half dozen in the other. Actually no probably not much sense owning both.