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Who has taken a beating in their bonds?
Old 03-23-2020, 11:03 AM   #1
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Who has taken a beating in their bonds?

Hi there I do not post much but mainly enjoy reading all of the threads. I was just wondering why the market has fallen out of the bottom of the municipal and other (total bond) market funds the last 5 days? I know the fed is taking extraordinary steps to back these markets and I see the vanguard tax exempt etf (the one they have) is presently up about 2.5%. Thoughts?
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Old 03-23-2020, 11:15 AM   #2
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There are other threads about this, but yes, we are heavily invested in bond funds, and nearly all of it is in total bond, short-term bond, and DODIX. I haven't looked in two weeks, but I figure we are down quite a bit for the month and some for the year.
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Old 03-23-2020, 11:36 AM   #3
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All sorts of bond funds... High yield bond funds (think risky payers), Municipal funds, think cities closing businesses that pay property tax, Asia Pacific bond fund.. think Australia, Malaysia, Japan, Probably there is some fund out there that specializes in airline bonds...
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Old 03-23-2020, 11:37 AM   #4
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As stated there is another thread on this, but the 100,000 ft view is
*investors need to raise cash and liquidate what they can find buyers for.
*flight to quality/fear of bond rating downgrades
*muni bonds are thinly traded making them illiquid when bond fund/ETFs need to sell to meet redemptions
*rebalancing out of bonds into stocks to pick up bargins (catch the falling knife)

*lengthy back and forth about individual bonds vs. bond funds
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Old 03-23-2020, 11:44 AM   #5
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can someone point out the other thread this was extensively discussed in. I really guess I should have been following this more closely! I know I am not alone in this here, but boy would I like the last month back as a do over!
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Old 03-23-2020, 03:26 PM   #6
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I think its here:

Why are my bonds down?
https://www.early-retirement.org/for...d.php?t=102767
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Old 03-25-2020, 07:35 AM   #7
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I think most of us have. I'm under the assumption that it was due to the liquidity crunch of corporate bonds, and with the FED being a backstop, it should go up -- not all the way due to normal levels, as credit default risk has definitely gone up.
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Old 03-25-2020, 07:42 AM   #8
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My AA is (or was) 50/50 and compared to my stock fund holdings the bond funds have held up fairly well -1.07%.
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Old 03-25-2020, 07:54 AM   #9
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my muni bonds have taken a major dump (in value) but I hold them to maturity anyway
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Old 03-25-2020, 08:38 AM   #10
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my muni bonds have taken a major dump (in value) but I hold them to maturity anyway
Yep, I consider them a lot safer than corporates regardless of what the market says. Actually, my muni holdings showed a nice paper gain before the panic set in. I had one or two that showed a 10%-12% appreciation from my basis price. I was almost tempted to sell them, but then I would have lost that tax-free cash flow.

Since the crash it looks like the paper value of my muni portfolio is off about 8%. But the only number that matters to me is the one that applies when the muni bond matures or is called.
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Old 03-25-2020, 09:00 AM   #11
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... the only number that matters to me is the one that applies when the muni bond matures or is called.
FTFY

Our TIPS do not seem to be down. Maybe 2% from the first of the year but they paid interest in January.

In a small nonprofit where DW and I are on the investment committee we hold about $2M in BBB corporates that by policy will be held to maturity. The only thing we care about is whether the total of defaults (if any) will be greater or less than the amount of extra interest we collect compared to higher-rated bonds. We pay no attention to the (fluctuating) market value of the bonds.

We do not permit the investment advisor to buy bond funds except in trivial amounts when he has cash to park temporarily.
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Old 03-26-2020, 07:36 AM   #12
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various bond funds we hold and their YTD returns:

MWTRX (active "total" bond fund, heavier on corporates): .2%
FXNAX (Fido total bond): 1.9%
FIPDX (Fido TIPS): 2.3%
FJRLX (Fido short term): -3.6%
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Old 03-26-2020, 07:39 AM   #13
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Most of my FI is in cd's but I do have a couple of bond funds and yes.....they are down.
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Old 03-26-2020, 07:45 AM   #14
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Vanguard Total Bond (VBTLX) is up 1.5% year to date.
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Old 03-26-2020, 09:26 AM   #15
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I had an Agency bond called earlier this month. First early call I've ever had. It was due in June so no big loss, but will be the first bond that came due that will be used for living expenses since I retired. Been so lucky to retire into the great bull.
My last corporate bond (outside of funds) is a Marriott issue that was rated AA when I bought it. Due in October and slated for 4Q living expenses. Holding till it matures.
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Old 03-26-2020, 09:31 AM   #16
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Vanguard Total Bond (VBTLX) is up 1.5% year to date.
check out BKN
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Old 03-26-2020, 09:36 AM   #17
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BND is up for the year, past 6 months, YTD, and past 3 months. Total Return (all that matters, not just NAV).

Down less than 1% for the past month. Yawn.

https://stockcharts.com/freecharts/perf.php?SPY,BND

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Old 03-26-2020, 10:26 AM   #18
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check out BKN
Ouch!
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Old 03-26-2020, 10:47 AM   #19
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check out BKN
Wouldn't expect any leverage product to be very stable right now.
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Old 03-26-2020, 11:14 AM   #20
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It's certainly been a volatile year for my state specific muni fund.
The + $.23 yesterday is the biggest move (up or down) I've ever seen for this fund.

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