I hold the Vanguard Intermediate Term Tax Exempt Bond Fund in my taxable account. I started to put money into it 18 months ago when my Ally CDs were maturing and offered low rates compared to the bond fund which had a dividend about 2.6% at the time. I was putting extra money into it every month. I stopped that several months ago.
Every single purchase I made plus all the reinvested dividends are under water and have a nav that is going down each month and not 1 single purchase over the 18 months is positive. I liked this fund as it was tax exempt (cap gains are taxable) despite being in the 12 and 15% brackets over that time.
It is pretty disheartening to see the value of the fund drop $2k+ every month. It is basically cash that I put there vs an Ally online saving account at 50 bp or a CD at 55 bp but those wouldn't lose value like this but then there is loss to inflation which is also hitting the bond fund as it decreases. I wanted to get my AA more conservative from 55/45 to 40/60 but bond funds are a losing proposition forcing you to hold highly volatile equities at a higher AA than I want.
To add insult to injury, I hold the Vanguard Ultra Short Term Bond Fund in my rollover IRA and it loses $500- $600 a month also. I hold the Short Term Investment Grade Bond Fund in my rollover IRA and it is losing $2k+ a month also.
I am pretty frustrated with this, holding bond funds is going broke slowly. I fully understand duration and that bond funds are for ballast not making big gains but when your equity funds are tanking and your fixed income funds are going down thousands a month and this is the 1st year I have to take an RMD, well I'm pulling money from a loser no matter what fund I select in the rollover IRA.
To the OP, long term bond funds will really take a hit in a rising interest rate environment due to their high duration, personally I would not be in those.