Why are my bonds down?

[Truckinalong]

Quote:

Originally Posted by BeachOrCity For index funds? Don’t plan on that! They are following the index and do little to no analysis of the underlying companies. If you want them putting thought into it buy and pay the fee for Wellesley or Wellington.

VWAHX is not a true index fund, up to 20% of it is non rated or below investement grade assets they choose. It tends to pay 1% more or so over the intermediate fund but is subject to more price fluctuation due to slightly longer duration than VWITX and this portfolio composition.

[BeachOrCity]

Quote:

Originally Posted by Truckinalong VWAHX is not a true index fund, up to 20% of it is non rated or below investement grade assets they choose. It tends to pay 1% more or so over the intermediate fund but is subject to more price fluctuation due to slightly longer duration than VWITX and this portfolio composition.

While the above is true, the management fee portion of this fund's expense ratio for admiral shares is .07%. I can't imagine that it is much more than just buying "what's on the list" at that expense ratio. For comparison, total bond is .04% for the management fee portion.

You can't get something for nothing. If one wants a fund that is doing the analysis on the underlying bonds (rather than just an index or believing what Moody's says)....one has to pay for it. Maybe not pay top dollar, but it does have to be paid for.

[Truckinalong]

Agreed, individual tax situation (tax exempt may or may not matter) and risk profile matter to go for VWAHX based on personal objectives, not for everyone and I am not here to promote one way or other.

[socca]

Quote:

Originally Posted by socca Here are the VG muni bond fund AUM numbers for 03/31/20: • VG Muni Money Market: 18.0 • VG Short-Term Tax-Exempt: 15.7 • VG Limited-Term Tax-Exempt: 28.8 • VG Intermediate-Term Tax-Exempt: 71.8 • VG Long-Term Tax-Exempt: 13.8 • VG High-Yield Tax-Exempt: 15.0 • TOTAL: 163.1 For reference, here is : • VG Federal Money Market: 183.3

Here are the VG muni bond fund AUM numbers for 04/30/20:

• VG Muni Money Market: 18.2
• VG Short-Term Tax-Exempt: 16.1
• VG Limited-Term Tax-Exempt: 28.6
• VG Intermediate-Term Tax-Exempt: 70.6
• VG Long-Term Tax-Exempt: 13.5
• VG High-Yield Tax-Exempt: 14.1
• TOTAL: 161.1

For reference, here is :
• VG Federal Money Market: 188.4

Comment:
• no surprises since last month. The 'flight to safety' has slowed considerably but not stopped completely. The month-to-month increase in Federal Money-Market has slowed considerably, and the rate at which money is flowing out of the longer-term VG muni-bond funds has also dropped.
• it's interesting that some investors have taken advantage of the extremely steep yield curve at the short end of the VG muni bond fund yield curve to beef up their investment in Short-Term Tax-Exempt, which had a modest month-to-month increase in AUM.
• standard disclaimer: I don't bother trying to distinguish whether a change in VG bond fund AUM is due to client purchases / sales vs. a change in the market value of the bonds in the fund, so my conclusions may be bogus. I'm just SGOTI so you've been forewarned!