galeno
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Post by galeno on Apr 8, 2022 22:37:44 GMT
When should a USD based retiree switch from 100% US investment grade bonds to World bonds (44% USD)?
SUAG is 100% US bonds.
ER = 0.25%. YTM = 2.93%. Duration = 6.79 yr.
Credit qual = AA. YTD = -3.92%.
AGGG is World bonds.
ER = 0.10%. YTM = 2.13%. Duration = 7.32 yr. Credit qual = AA-. YTD = -4.32%.
DXY = 99.84.
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Post by FD1000 on Apr 11, 2022 20:36:15 GMT
A typical retiree should stay mostly in high-rated bonds. These bonds supposed to be ballast for stocks. ( link) Vanguard Target Retirement Income Fund (VTINX) has about 70% bonds split up at 70/30 (US/Abroad). Pay attention, this fund also have about 17% in Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares. Attachments:
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galeno
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Post by galeno on Apr 13, 2022 10:03:11 GMT
Today's DXY = 100.42.
The USA and its currency will be pushed out of Europe and Asia by China and Russia.
Our TWBM UCITS ETF holds 44% USD denominated bonds.
At what level DXY would it make sense for a USA domiciled investor to go from TBM to TWBM?
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hondo
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Post by hondo on Apr 13, 2022 15:37:49 GMT
A typical retiree should stay mostly in high-rated bonds. These bonds supposed to be ballast for stocks. ( link) Vanguard Target Retirement Income Fund (VTINX) has about 70% bonds split up at 70/30 (US/Abroad). Pay attention, this fund also have about 17% in Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares. IYO, do you think the Inflation-Protected bonds are helping VTINX very much at this time?
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Post by Mustang on Apr 13, 2022 17:42:05 GMT
I hadn't really considered bonds because of such low rates and I'm more of a total return investor. But I thought I'd take a look at VTINX. I added BND just for grins. According to Morningstar, VTINX is 67% fixed income, VWIAX is 55% fixed income, and BND is 98% income. If I remember correctly it wasn't long ago Wellesley (VWIAX) was 65% fixed income so it looks like the managers are doing their job in preparing for the future.
12-MO 3-YR 5-YR 10-YR 15-YR YTD
VTINX -2.9 4.9 4.8 4.8 4.9 -6.6
VWIAX 0.9 6.7 6.4 6.8 6.7 -5.1
BND -6.9 1.1 1.5 1.9 3.4 -8.0
I could be wrong but with such low returns I'm assuming dividends are not included in the return numbers. If they are this is dismal performance. If they aren't do the dividends make up for the lack of returns? There is a two percent difference between VTINX and Wellesley and a 5 percent difference between BND and Wellesley.
I really don't know that is why I'm asking.
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Post by mozart522 on Apr 13, 2022 18:30:22 GMT
I hadn't really considered bonds because of such low rates and I'm more of a total return investor. But I thought I'd take a look at VTINX. I added BND just for grins. According to Morningstar, VTINX is 67% fixed income, VWIAX is 55% fixed income, and BND is 98% income. If I remember correctly it wasn't long ago Wellesley (VWIAX) was 65% fixed income so it looks like the managers are doing their job in preparing for the future. 12-MO 3-YR 5-YR 10-YR 15-YR YTD VTINX -2.9 4.9 4.8 4.8 4.9 -6.6 VWIAX 0.9 6.7 6.4 6.8 6.7 -5.1 BND -6.9 1.1 1.5 1.9 3.4 -8.0 I could be wrong but with such low returns I'm assuming dividends are not included in the return numbers. If they are this is dismal performance. If they aren't do the dividends make up for the lack of returns? There is a two percent difference between VTINX and Wellesley and a 5 percent difference between BND and Wellesley. I really don't know that is why I'm asking. Yes, dividends are included, and no the returns are not dismal. You are comparing apples to oranges. Wellesley currently has 57% more equity than VTINX. Wellesly takes more risk; higher SD, longer duration, longer marurity, higher coupons. Wellesly is active and goes for mainly intermediate corporate bonds and high dividend US stocks. VTINX is made up of indexes with bonds covering all angles and stocks in the large blend area both US and international. |
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Deleted
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Post by Deleted on Apr 13, 2022 18:36:21 GMT
VTINX has produced a real return of 1.84% annualized over 10 years (10 year annualized return minus 10 year annualized inflation rate). I think it is accomplishing what it was designed to do.
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Post by Chahta on Apr 13, 2022 18:48:57 GMT
I would think LT bonds are not much ballast in this unique time. Rates are close to the bottom going no where but up. YTD returns indicate that.
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hondo
Commander
Posts: 148
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Post by hondo on Apr 13, 2022 19:53:50 GMT
I hadn't really considered bonds because of such low rates and I'm more of a total return investor. But I thought I'd take a look at VTINX. I added BND just for grins. According to Morningstar, VTINX is 67% fixed income, VWIAX is 55% fixed income, and BND is 98% income. If I remember correctly it wasn't long ago Wellesley (VWIAX) was 65% fixed income so it looks like the managers are doing their job in preparing for the future. 12-MO 3-YR 5-YR 10-YR 15-YR YTD VTINX -2.9 4.9 4.8 4.8 4.9 -6.6 VWIAX 0.9 6.7 6.4 6.8 6.7 -5.1 BND -6.9 1.1 1.5 1.9 3.4 -8.0 I could be wrong but with such low returns I'm assuming dividends are not included in the return numbers. If they are this is dismal performance. If they aren't do the dividends make up for the lack of returns? There is a two percent difference between VTINX and Wellesley and a 5 percent difference between BND and Wellesley. I really don't know that is why I'm asking. Comparing VTINX & VWIAX, it seems to me that the difference between the two is about what I would expect since Wellesley generally has 10% more equity and VBIAX (Balanced Index), will generally do a little better than Wellesley with its 60% equities. Of course, this year may be an exception. And, there is also what mozart said above, which I think is correct. |
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hondo
Commander
Posts: 148
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Post by hondo on Apr 13, 2022 20:01:35 GMT
galeno, FD1000, hondo, Mustang, mozart522,@django, Chahta, I still would be interested to know what you folks think about the Inflation-Protected bonds in VTINX. Do you think they are doing any good? Are they helping with the inflation situation?
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Post by FD1000 on Apr 13, 2022 20:07:57 GMT
galeno , FD1000 , hondo , Mustang , mozart522 ,@django , Chahta , I still would be interested to know what you folks think about the Inflation-Protected bonds in VTINX. Do you think they are doing any good? Are they helping with the inflation situation? Of course, they help down only -0.5% YTD while US To bond is down -8.1%. Attachments:
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galeno
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Posts: 221
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Post by galeno on Apr 13, 2022 20:30:11 GMT
If you hold >/= 60% equities you DON'T need TIPS. Stick with nominal bonds. Starting at 60% stocks every 5% decrease in equity should be replaced with 5% TIPS. E.g. 50% stocks + 10% TIPS + 40% nom bonds. E.g. 30% stocks + 30% TIPS + 40% nom bonds. galeno , FD1000 , hondo , Mustang , mozart522 ,@django , Chahta , I still would be interested to know what you folks think about the Inflation-Protected bonds in VTINX. Do you think they are doing any good? Are they helping with the inflation situation? Of course, they help down only -0.5% YTD while US To bond is down -8.1%. |
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hondo
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Post by hondo on Apr 13, 2022 21:21:20 GMT
fd1000:
Thanks for your reply. That is what I was wanting to know.
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hondo
Commander
Posts: 148
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Post by hondo on Apr 13, 2022 21:29:46 GMT
galeno:
Thanks for the reply. That is a interesting method that I had not heard about before.
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Post by Chahta on Apr 13, 2022 23:12:17 GMT
galeno , FD1000 , hondo , Mustang , mozart522 ,@django , Chahta , I still would be interested to know what you folks think about the Inflation-Protected bonds in VTINX. Do you think they are doing any good? Are they helping with the inflation situation? Are they worth more since they have higher yields due to inflation? I doubt it. Seems like the TIPS funds I looked at are down for the year. |
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hondo
Commander
Posts: 148
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Post by hondo on Apr 14, 2022 15:22:56 GMT
galeno , FD1000 , hondo , Mustang , mozart522 ,@django , Chahta , I still would be interested to know what you folks think about the Inflation-Protected bonds in VTINX. Do you think they are doing any good? Are they helping with the inflation situation? Are they worth more since they have higher yields due to inflation? I doubt it. Seems like the TIPS funds I looked at are down for the year.
What bond funds are not down for the year? I guess the question is, what bond funds are down the least.
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Post by chang on Apr 14, 2022 15:45:17 GMT
Are they worth more since they have higher yields due to inflation? I doubt it. Seems like the TIPS funds I looked at are down for the year.
What bond funds are not down for the year? I guess the question is, what bond funds are down the least.
RPHIX and RSIIX are in positive territory for the year. See the discussion here. |
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Post by davidsherman on Apr 16, 2022 15:31:56 GMT
Look at I bonds issued by US Government
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Post by davidsherman on Apr 16, 2022 15:38:27 GMT
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Post by Mustang on Apr 16, 2022 16:34:47 GMT
I hadn't really considered bonds because of such low rates and I'm more of a total return investor. But I thought I'd take a look at VTINX. I added BND just for grins. According to Morningstar, VTINX is 67% fixed income, VWIAX is 55% fixed income, and BND is 98% income. If I remember correctly it wasn't long ago Wellesley (VWIAX) was 65% fixed income so it looks like the managers are doing their job in preparing for the future. 12-MO 3-YR 5-YR 10-YR 15-YR YTD VTINX -2.9 4.9 4.8 4.8 4.9 -6.6 VWIAX 0.9 6.7 6.4 6.8 6.7 -5.1 BND -6.9 1.1 1.5 1.9 3.4 -8.0 I could be wrong but with such low returns I'm assuming dividends are not included in the return numbers. If they are this is dismal performance. If they aren't do the dividends make up for the lack of returns? There is a two percent difference between VTINX and Wellesley and a 5 percent difference between BND and Wellesley. I really don't know that is why I'm asking. Comparing VTINX & VWIAX, it seems to me that the difference between the two is about what I would expect since Wellesley generally has 10% more equity and VBIAX (Balanced Index), will generally do a little better than Wellesley with its 60% equities. Of course, this year may be an exception. And, there is also what mozart said above, which I think is correct. I understand that. I just don't understand the appeal of WTINX. Both funds are in the same category (conservative-allocation). Wellesley only recently reduced its bond exposure. It normally runs 60-65% bonds. Here is a list of returns over the years. If you look at 2008 the managed fund, Wellesley Income, did better during the crash than the index fund and by going 55% bonds its managers are setting it up to preform better in the future.
Year WTINX VWINX 2008 -10.9 -9.3
2009 14.3 16.0
2010 9.4 10.7
2011 5.3 9.6
2021 8.2 10.2
2023 5.9 9.2
2014 5.5 8.1 2015 -0.2 1.3
2016 5.3 8.1
2017 8.5 10.2
2018 -2.0 -2.6
2019 13.6 16.4
2020 10.0 8.5
2011 5.3 8.6
Edit: VBIAX isn't in the same category. It is a moderate-allocation fund (50-70% equity). If you are comparing it to a managed fund it needs to be compared to VWENX. Although it is very close Wellington beats it in every time frame (12-mo, 3-yr, 5-yr, 10-yr and 15-yr).
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