The Bond Fund Rout Continues

Bozo | Dec 10, 2016 | 1,375 posts since 2011

For those who have followed my posts, you might have noted I am no fan of bond funds in a rising-rate environment. The rout continued today, when VBTLX (your garden-variety intermediate-term bond fund) lost FOUR (count 'em four) cents in NAV. That's two month's interest in ONE DAY. Poof, gone.

Ahem, are you not glad you have laddered CDs?

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Bozo | Dec 11, 2016 | 1,375 posts since 2011

For your chuckle of the day, I showed my wife the respective gains/losses of her 401K, broken out by fund, from October 1, 2016, to date. She has two funds: VFIAX and VBTLX. Allocated conservatively, 60% equities, 40% bond funds. The loss on VBTLX was not pretty.

mur44 | Dec 11, 2016 | 5 posts since 2016

Still, the year-to-date (YTD) yield at 2.11% far exceeds inflation measure by CPI-U. I also like 'high' yielding CD's.

Bozo | Dec 12, 2016 | 1,375 posts since 2011

Mur44, the issue is yield "going forward". In this case, the trend is not your friend.

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