I mean that the loss in NAV would not be offset by increased dividends until after rates began to fall. As I understand it, NAV falls by approximately the yield rise times the fund duration. If that’s true, then the NAV for a fund with 5-year duration would have fallen by about 50% over that 20 year period. I’d have to run the numbers but I don’t think the investor would have recouped their original investment before sometime in the early-80’s considering the lag in dividend increases due the time required to turn over the bonds in the fund portfolio. Am I missing something in my line of reasoning?It depends on what you mean by underwater.So, I’m looking at Chief_Eingineer’s chart and thinking that someone who purchased a total bond fund in the early-60’s was underwater on that investment until the early-80’s since it looks like yields rose at least once in every 5-6 year period. Is that your interpretation as well?
Statistics: Posted by KanCityKid — Tue Jan 21, 2025 5:32 pm