Join Early Retirement Today
Reply
 
Thread Tools Display Modes
should I keep VWAHX ?
Old 09-15-2007, 02:06 PM   #1
Full time employment: Posting here.
 
Join Date: Sep 2006
Posts: 608
should I keep VWAHX ?

I have a position in VWAHX (Vgd High-Yield Tax-Exempt) and
wondering if I should sell. My marginal taxrates are 25%/7%
(fed/state) so the multiplier of taxable vs state-tax only income
is (100-7)/(100-25-7) = 1.37. Thus the 4.5% yield on VWAHX
is equivalent to about 6.15% taxable.

Only one Vanguard bond fund does better than 6% - VWEHX
Corporate High-Yield - and one about equals it - Long-Term
Investment Grade.

Long-term is not exciting due to interest-rate sensitivity. VWEHX
is rated "low quality" (Morningstar style box) while VWAHX is
"high quality". Which seems odd since both are "high yield".

So I'm tempted to stick with VWAHX, in the spirit of diversification.
(I also have a position in VWEHX).
JohnEyles is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-15-2007, 11:11 PM   #2
Thinks s/he gets paid by the post
twaddle's Avatar
 
Join Date: Jun 2006
Posts: 1,703
Lots of the academic types don't like high yield bonds of any type, especially wrt diversification. They tend to be highly correlated to stocks since when the market tanks, defaults go up.

I've also heard that the AMT hit on those munis can potentially reduce your yield, but I haven't looked at that fund in detail.

But as long as you understand what you've got there and it works for your situation, I don't see any reason to sell.
__________________
Emancipated from wage-slavery since 2002
twaddle is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


» Quick Links

 
All times are GMT -6. The time now is 06:01 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.