- Joined
- Nov 27, 2014
- Messages
- 9,338
Like many, I've been frustrated with low return and volatility of my bond funds. But, I looked at things a bit deeper today and things don't seem too bad. Wondering if I'm missing something.
One of my funds is DBLTX. The average maturity is 3.48 years and the current yield is about 3.6.
Of course there is the risk of default, but the interest rate risk seems very low. If anything, rates seem to be more likely to go down. Comments are welcome on these two aspects, but I'm looking to focus on the yield.
In the spirit of where to hold my cash for a year or two, this doesn't seem as bad as I thought. The yield will no doubt go down as older bonds mature and new bonds are brought in, but that's not going to happen overnight. The turn over is 28% so it seems like expecting a year or so more out of this fund isn't a bad place to hold some funds. Anything I'm missing or is holding this for a while longer (12-18 months) reasonable for the goal of >3% return for a year or so?
One of my funds is DBLTX. The average maturity is 3.48 years and the current yield is about 3.6.
Of course there is the risk of default, but the interest rate risk seems very low. If anything, rates seem to be more likely to go down. Comments are welcome on these two aspects, but I'm looking to focus on the yield.
In the spirit of where to hold my cash for a year or two, this doesn't seem as bad as I thought. The yield will no doubt go down as older bonds mature and new bonds are brought in, but that's not going to happen overnight. The turn over is 28% so it seems like expecting a year or so more out of this fund isn't a bad place to hold some funds. Anything I'm missing or is holding this for a while longer (12-18 months) reasonable for the goal of >3% return for a year or so?