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Post by chang on Nov 30, 2022 16:01:47 GMT
I’ve been hiding in RPHIX for the last couple of years, with no regrets. But now that MM/STB funds are yielding > 4%, I think it’s time to let my duration move upward.
Money’s at Fido, and I’m thinking about FNSOX:
FNSOX is yielding 4.70% (30D SEC)
FNSOX duration 2.57 yr
FNSOX expense ratio is 0.03%
Any reason not to park my money here?
With the yield curve inverted, what earthly reason would there be to buy FXNAX, with a duration of 6.05 yrs and a yield of 4.32% (compared to FNSOX).
I don’t know if 2.57 years duration is a “sweet spot”, but this fund seems OK to me.
Appreciate your input & TIA. I plan to sell/buy tomorrow after the November divvy is paid today.
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Post by Deleted on Nov 30, 2022 16:37:52 GMT
Some have posted here and at Fidelity about increasing their bond durations (e.g., TLT). I am sticking with my managed PIMCO income funds with their derivative adjusted durations.
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Post by chang on Nov 30, 2022 19:55:42 GMT
Some have posted here and at Fidelity about increasing their bond durations (e.g., TLT). I am sticking with my managed PIMCO income funds with their derivative adjusted durations. You mean like PTTRX? Duration 5.7 years, yield 4.25%. As I mentioned, with an inverted yield curve, why go long? Unless you’re expecting a big NAV bounce…? |
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Post by Deleted on Nov 30, 2022 20:07:52 GMT
Some have posted here and at Fidelity about increasing their bond durations (e.g., TLT). I am sticking with my managed PIMCO income funds with their derivative adjusted durations. You mean like PTTRX? Duration 5.7 years, yield 4.25%. As I mentioned, with an inverted yield curve, why go long? Unless you’re expecting a big NAV bounce…? I had PIMIX (PIMCO Income Instl) in mind. 5.16% dist, effective duration 2.94 yrs) and PDI or PAXS. |
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Post by chang on Nov 30, 2022 21:03:44 GMT
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Post by Deleted on Nov 30, 2022 21:13:32 GMT
The distr yield at NAV as of 10/31 is 6.76% ($ share price) $0.550 Added by Edit: The first quote came from M*, based on yesterday's NAV, which is updated daily. The NAV has increased in the last two weeks, so distr based on NAV might be lower for the Nov. 30 quote. |
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Post by Deleted on Nov 30, 2022 21:36:57 GMT
$75 fees on fidelity, but I came across this today,
Vanguard Short-Term Investment-Grade Fund Institutional Shares (VFSIX)
30 day SEC yield - 5.11%
Average effective maturity 2.9 years
Average duration 2.7 years
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Post by chang on Dec 1, 2022 8:08:43 GMT
$75 fees on fidelity, but I came across this today, Vanguard Short-Term Investment-Grade Fund Institutional Shares (VFSIX) 30 day SEC yield - 5.11% Average effective maturity 2.9 years Average duration 2.7 years I ran M* Chart comparing VFSIX and FNSOX. Very similar, except for March 2020! VFSIX shows more volatility: steeper drops and steeper climbs. On the whole, pretty close... I have an account at VG and it would be easy enough to move the money if I wanted to. For the nonce I think FNSOX will do. |
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Post by Chahta on Dec 1, 2022 14:18:05 GMT
The SEC 30 day never made sense by crunching the numbers. As I understand it the SEC yield is to COMPARE funds, not what you will get paid. The TTM is more accurate (yes it will go up as bonds mature out of the funds). I would not expect to see 4% anytime soon in a ST bond fund. Go back and review the VGSH thread. Personally if you are looking for TR PIMIX looks better with NAVs so low. With bonds so beat up this year how much more interest rate risk is there?
Why not 4% treasuries?
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Post by anitya on Dec 1, 2022 18:56:32 GMT
chang, Any reason why you do not want to buy at Fidelity 1 yr. US Treasuries yielding 4.7% instead?
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Post by chang on Dec 1, 2022 20:55:33 GMT
chang, Any reason why you do not want to buy at Fidelity 1 yr. US Treasuries yielding 4.7% instead? Actually I hadn’t looked. How is this possible? Is the yield curve so badly inverted that 2.5 years is already well past the duration of highest yield? |
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Post by newtecher on Dec 2, 2022 2:09:13 GMT
IF you are OK with an actively managed fund with lower yield but also lower volatility, the FPA income funds (FPNIX and FPFIX) are holding up pretty well.
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Post by anitya on Dec 2, 2022 4:04:43 GMT
chang , Any reason why you do not want to buy at Fidelity 1 yr. US Treasuries yielding 4.7% instead? Actually I hadn’t looked. How is this possible? Is the yield curve so badly inverted that 2.5 years is already well last the duration of highest yield? There are some missing words in your question. In any case, I probably will not be able to answer your question. I just look at what is available and decide. When the Fed is active, it is difficult to predict direction of credit, let alone rates. I bought some Treasuries last week. |
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Post by chang on Dec 2, 2022 5:56:52 GMT
anitya “last” should be “past” … I corrected it.
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Post by chang on Dec 2, 2022 16:47:37 GMT
I’m comparing
VGSH
VCSH
BSV
FNSOX
Interesting how little extra yield there is between VGSH and VCSH. With possible recession risks, why isn’t VCSH yielding a lot more?
The last two funds are roughly 75/25 government/corporate.
Opinions appreciated here (or on the VGSH thread).
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Post by Norbert on Dec 2, 2022 17:23:06 GMT
chang , Any reason why you do not want to buy at Fidelity 1 yr. US Treasuries yielding 4.7% instead? Actually I hadn’t looked. How is this possible? Is the yield curve so badly inverted that 2.5 years is already well past the duration of highest yield? Present US Treasury Yield Curve
(click to enlarge)
August 30 US Treasury Yield Curve
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Post by chang on Dec 2, 2022 17:47:55 GMT
Thanks Norbert. That’s a nasty peak at the 9-month point! Maybe the USTB category is where I should be looking. I used to own VUSFX (for a while, while I was exiting bonds). However, the USTB category is different than STB: there’s almost no A-rated, and about a third BBB-rated bonds. See here: investor.vanguard.com/investment-products/mutual-funds/profile/vusfx#portfolio-compositionMMs seem like an OK place to be for the time being. I will use FZDXX at Fido until I come to a decision. |
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Post by Chahta on Dec 6, 2022 17:42:21 GMT
After touting Treasuries, a short duration bond OEF worth looking at is by Crossing Bridge, CBLDX. The yield is less than Treasuries but capable of CGs. It has done decently this year against rising rates. It has 1 year more duration than RPHIX.
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Post by Deleted on Dec 15, 2022 18:28:23 GMT
I’m comparing VGSH VCSH BSV FNSOX Interesting how little extra yield there is between VGSH and VCSH. With possible recession risks, why isn’t VCSH yielding a lot more? The last two funds are roughly 75/25 government/corporate. Opinions appreciated here (or on the VGSH thread). Chang, Did you made the decision on which fund to go with and why? If you don't mind please share your decision. Thanks |
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Post by chang on Dec 15, 2022 23:34:23 GMT
@jovan Have been sitting in FZDXX (yielding 3.8%) since the OP, but I just entered a (large) order for the latest 6M Treasury with an expected yield of 4.642%. I’m inclined to put the remainder into FNSOX.
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