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02-25-2009, 10:51 AM
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#1
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Confused about dryer sheets
Join Date: Feb 2009
Posts: 1
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Vfiix
In this environment of low interest rates and possible home refinancing, will VFIIX (GNMA Fund) be able to maintain its NAV?
For a steam of income while preserving capital is VFIIX, still a solid choice as it has in the past?. VBMF (total Bond Market) is also a consideration.
I would appreciate your comments and/or suggestions.
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02-25-2009, 11:52 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Oct 2005
Posts: 4,898
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I would also be interested in reading comments on VFIIX in which I may invest soon. Thanks all!
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02-25-2009, 03:29 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Posts: 1,901
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Looks like the NAV has traded in a range of about $1.00 over the last 10 years. Right now it is at the high of that range. If your primary reason to hold it is income, I would not worry about the NAV too much.
VFIIX Stock Charts - Vanguard GNMA;Inv Stock Market Charts - Free Stock Charts
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
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03-06-2009, 05:13 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Oct 2005
Posts: 4,898
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Hasn't anyone else invested in this fund? Too boring? I have about 80K from an inheritance coming and I'm hoping to find a fund that has boring predictable returns.
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03-06-2009, 05:23 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Location: yonder
Posts: 2,851
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 Quote:
Originally Posted by Oldbabe
Hasn't anyone else invested in this fund? Too boring? I have about 80K from an inheritance coming and I'm hoping to find a fund that has boring predictable returns.
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Yes, my wife and I each own this fund. Our neighbor also owns the fund. The fund just keeps on truckin' along. It doesn't seem to be much affected by the economic climate. I wish the neighbor would go home now because he's as boring as the fund. And, if someone has an idea why this fund might eventually be in trouble, I, too, would like to hear about it.
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03-06-2009, 05:41 PM
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#6
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Moderator Emeritus
Join Date: May 2007
Posts: 12,876
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To quote Mr. Pappas, the manager of VFIIX:
"...with yields having gone down so much, it's hard to get excited about the future [of GNMAs]. Today it's best to think about GNMAs as attractive versus cash and treasury alternatives while being mindful that they are bonds that will lose when rates eventually go up".
Disclaimer: I sold VFIIX last month (locking in a nice gain) after having held it for 9 years. I reinvested the money in high quality corporate bonds.
__________________
47 years old, single, no kids. Exited the job market in 2010 (age 36). Have lived solely off my investments since 2015 (age 41). No pensions.
Current AA: real estate 64% / equities 10% / fixed income 16% / cash 10%
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03-06-2009, 06:14 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Location: yonder
Posts: 2,851
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Quote:
Originally Posted by FIREdreamer
To quote Mr. Pappas, the manager of VFIIX:
"...with yields having gone down so much, it's hard to get excited about the future [of GNMAs]. Today it's best to think about GNMAs as attractive versus cash and treasury alternatives while being mindful that they are bonds that will lose when rates eventually go up".
Disclaimer: I sold VFIIX last month (locking in a nice gain) after having held it for 9 years. I reinvested the money in high quality corporate bonds.
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Firedreamer, I DIDN'T REALLY want to hear what might go wrong with this fund.
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03-06-2009, 06:17 PM
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#8
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Moderator Emeritus
Join Date: May 2007
Posts: 12,876
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Quote:
Originally Posted by redduck
Firedreamer, I DIDN'T REALLY want to hear what might go wrong with this fund.
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OOPS? 
But if it helps, the duration of the fund is quite short, so VFIIX shouldn't get hurt too much by rising interest rates...
__________________
47 years old, single, no kids. Exited the job market in 2010 (age 36). Have lived solely off my investments since 2015 (age 41). No pensions.
Current AA: real estate 64% / equities 10% / fixed income 16% / cash 10%
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03-06-2009, 06:23 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Oct 2005
Posts: 4,898
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So a corporate bond fund might pay a higher yield now. But what about the tanking economy? What might cause a corporate bond fund to tank?
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03-06-2009, 11:12 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Location: yonder
Posts: 2,851
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Quote:
Originally Posted by FIREdreamer
OOPS?
But if it helps, the duration of the fund is quite short, so VFIIX shouldn't get hurt too much by rising interest rates... |
FIREdreamer: That's much, much better. Thank you. 
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