Any good ideas for Bond funds?

[Birchwood]

I have been trying do some AA.

Given the prediction of the interest rate, and considering different tax brackets, taxable and deferred taxable accounts, can you guys and ladies
give me some ideas on how to put bonds in your AA?

Thanks a lot.

 

[Chuckanut]

I use the James bond fund. Every month a glamorous woman stops by my house, makes me a martini, massages my neck, and hands me a dividend check.

Besides that fund I also use a GNMA fund and a medium term Treasury bond fund. I don't need tax free funds, but you might. Also, they are mostly in my tax deferred accounts.

 

[Gone4Good]

I have almost entirely shed fixed income duration risk. My "bond" allocation is now almost entirely in CDs, a stable value fund, merger arb funds (like MERFX), and floating rate funds (like FFRHX).

I probably won't own fixed income duration again until the yield curve inverts.

 

[clifp]

I have almost entirely shed fixed income duration risk. My "bond" allocation is now almost entirely in CDs, a stable value fund, merger arb funds (like MERFX), and floating rate funds (like FFRHX).

I probably won't own fixed income duration again until the yield curve inverts.

With the exception of a few individual issue that are maturing in the next 1-6 years, I moving toward this direction. I still have decent chunk of Vanguard GNMA and I'm still not sure if I should sell it or not.

In general,I think you have the opportunity to get a stable value fund, in your tax deferred account, I'd jump on it. Perhaps bite the bullet and get a 5 year CD 2% from PenFed. I think it makes no sense to hold long treasury bonds, and little sense to hold long corporate bonds or funds. GNMA and intermediate bonds funds are probably not awful (how is that for faint praise)

Warning I have been giving this same advice for a couple of years and I've been dead wrong for just as long.

 

[brewer12345]

With the exception of a few individual issue that are maturing in the next 1-6 years, I moving toward this direction. I still have decent chunk of Vanguard GNMA and I'm still not sure if I should sell it or not.

If you don't want duration, you definitely do not want Ginnies. Duration plus significant negatie convexity is realluy bad in an adverse rate scenario.

I have a modest smidge or two of duration in the form of a CEF trading at a discount, but its a small position. Most of my FI is a floating rate CEF, CDs, I bonds, cash and a few selectively chosen high yield individual bonds (junk typically has modest duration given the tendency of issuers to call their bonds frequently and the modest duration at issuance). When my prepayment penslty period id up in early July, I will be seriously considering terming out my ARM if 30 year fixed rates have not moved much from where they are.

 

[GrayHare]

Tough environment to buy bonds given that prices have been rising for three decades. Perhaps floating rate or non-US bonds are worth considering. Compared to other bonds, junk corporates better weather the storm of rising interest rates.

 

[dmdunca44]

I keep one year's worth of withdrawals in a short term investment grade bond fund. The rest is in VG total bond index.

 

[btbw2380]

It's been a tough environment to buy bonds for years, yet returns have been outstanding. Demonstrates to me that timing the bond market is about as likely as timing the stock market. Set a diversified portfolio and rebalance which will sell into strength and buy into weakness. If (when) bonds tank, the additional yield and opportunity to buy into weakness will be welcome.

 

[JPatrick]

If you expect rising rates consider FFRHX (floater.)
For tax free I use MUB which is a municipal bond ETF. If you have a Fidelity account you can buy it commission free. On this one you must watch the premium/discount as it does jump around a bit.
Fidelity's FNMIX is a new markets bond fund which has a nice yield and long term record.