BeachOrCity
Full time employment: Posting here.
- Joined
- Jun 1, 2016
- Messages
- 889
Vanguard VBTLX is having a strong year because it is 63.3% government bonds which always do well in a bear market. Read my previous comment on bond's performance during the last recession. However, VBTLX also have 17.6% Baa corporate bonds. Baa corporate bonds are higher risk during a bear market if some of the Baa companies goes bankrupt. This is why I invest in 100% treasury bonds such as VUSUX to eliminate that risk. VBTLX is still a good fund to have....but all the companies associated with the Baa corporate bonds in VBTLX must survive the recession. Too early to tell now since bankruptcies do take time.
I always thought this too....then the Fed basically committed to propping up all the Baa corporate stuff. So these marginal companies have access to debt at low rates and most will be able to survive on that.