the problem is the chart is flawed. a move from 2.08% on the 5 year bond is very different from the scenario that vbmfx or barclays saw.
over the 4 year period vbmfx saw intermediate term rates only rise less than 1% going from 4.03 to 4.76% not the 3.08% jump up in rates the short end took as it went from 2.06 to 5.62% . that is hardley an example of a soaring bond rate time frame for the intermediate term bond .
basically your comparisaon is looking at what happened when rates on intermediate term bonds rose ,76% over that time frame. there was little to be effected by a move like that.
the money market produced 11,702 and total bond 11,523.
had there been a real 3.06% rate increase in the intermediate term range the difference between the money market would have been pretty great.
the point is vbmfx hardly fell because there was less that a 1% change in 10 year rates,.
the chart is not illustrating the fact that that soaring bond rates had little effect . all it is showing is that when short term rates rise they can have little to do with where bond investors bid the intermediate term and longer bonds.
that we already know. the fed raising the short end by more than 1% has produced only 1 year the last 44 years where bonds lost money.
had the intermediate term bond actually seen a jump from 2.06 to 5.62 with a duration of 5.6 totay vbmfx would have fallen more than 16% in value .
back then its duration was closer to 7 which would have been a 25% drop with a 3 point increase. some of that would be offset by a increase in interest over time but no where near enough to make you get much more than whatever the rate was the day you bought vbmfx..
the discussion is what happens to intermediate term and longer bonds when investors bid them higher and higher like the last 2 weeks.