scrabbler1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 20, 2009
- Messages
- 6,703
To me that declining distributions of my bonds funds has been one of the most troubling aspects of the financial crisis. Fortunately bond were never more than 35% of my portfolio. Still lets look at the distributions of one of Vanguard most popular bond fund Vanguard GNMA (Admiral)
Monthly distributions per share
1/2008 .0454
1/2009 .0414
1/2010 .0254
1/2011 .0302
1/2012 .0288
1/2013 .0203
11/2013 .0233
Multiply by 12 and divide ~$10.50 you can see the yield has dropped tremendously.
So seeing that monthly income has been cut almost in 1/2 since the beginning. I would have to conclude that either the bond funds are pretty small portion of your income, or you had a pretty big cushion.
Wow, that is a pretty steep drop in your monthly dividends per share (DPS). In the big (corporate) bond fund I often refer to (it represents 35% of my overall portfolio and just over half of the taxable subset of it), the monthly DPS was just under 5 cents per share in late 2008 when I first began investing in it. In the 5 years I have been in it, the monthly DPS has dropped to just under 4 cents per share.
However, while the monthly DPS has dropped by about 21%, the number of shares I own has risen by about 28%, so my actual monthly dividend has remained pretty stable (0.79 x 1.28 = 1.01). The added shares came from the excess of monthly dividends over expenses as well as cap gain reinvestments and dividend sweeps from some other funds.
I agree that there has been an erosion of the monthly DPS and I have found it troubling. I own nearly 50,000 shares of my bond fund so even 1/10 of a cent per month translates to about $50 per month.