There are people smarter than bonds and bond funds than me so take this with a grain of salt.
I own bond funds to reduce overall volatility of my stock/bond portfolio. I do not own bond funds expecting them to preserve my principal and only have positive returns; I'm concerned about total return of the portfolio, not the individual returns of the components of the portfolio. I wouldn't change anything, but that's me.
If you've got a different mind set, you have lots of company here!![:D]( "Very Happy")
Many regular posters do seem to be focused on the individual component of their portfolio for bonds rather than total return of the whole portfolio. For those in that camp, the preference seems to be individual US Treasuries of shorter maturity rather than intermediate average maturity like VBTLX has. There's also some recurring sentiment to split the individual bonds among Regular Notes of 2, 3, 5 year maturities (or a mix) and Treasury Inflation Protected Securities (probably also on the shorter side for maturities). There's also discussion of matching the maturity to your need date (so for the last individual bond batch you'd redeem in 2031, you'd buy a maturity at 7 years, for bonds being redeemed in 2025, you'd buy 1-Year Notes, etc.).
If individual Treasuries are too much work for you to bother building/managing a ladder, then the second best recommendation from that camp seems to be bond funds with short durations (1-3 years rather than the 6.4 avg duration that VBTLX has).
I own bond funds to reduce overall volatility of my stock/bond portfolio. I do not own bond funds expecting them to preserve my principal and only have positive returns; I'm concerned about total return of the portfolio, not the individual returns of the components of the portfolio. I wouldn't change anything, but that's me.
If you've got a different mind set, you have lots of company here!
Many regular posters do seem to be focused on the individual component of their portfolio for bonds rather than total return of the whole portfolio. For those in that camp, the preference seems to be individual US Treasuries of shorter maturity rather than intermediate average maturity like VBTLX has. There's also some recurring sentiment to split the individual bonds among Regular Notes of 2, 3, 5 year maturities (or a mix) and Treasury Inflation Protected Securities (probably also on the shorter side for maturities). There's also discussion of matching the maturity to your need date (so for the last individual bond batch you'd redeem in 2031, you'd buy a maturity at 7 years, for bonds being redeemed in 2025, you'd buy 1-Year Notes, etc.).If individual Treasuries are too much work for you to bother building/managing a ladder, then the second best recommendation from that camp seems to be bond funds with short durations (1-3 years rather than the 6.4 avg duration that VBTLX has).
Statistics: Posted by bonesly — Sun Feb 11, 2024 4:00 pm