Originally Posted by photoguy
VFSUX dropped about 7% in 2008/2009 so not great but not terrible either.
Actually - that is pretty bad. Especially for a short-term bond fund. That's a good wake up call for exactly how risky such a fund is. A good example of why it should not be used as if it were a "low-risk" cash equivalent. No one would be happy with a 7% on what was supposed to be cash.
A fund much higher in Treasuries and govt-backed bonds is a much better choice if you are looking for diversification against equities during times of crisis.
VBIRX Vanguard Adm Short-term Bond Funds VBIRX vs VFSUX chart