VTAPX vs VFSUX

[Midpack]

I have my short duration holdings in VFSUX (Short-Term Investment-Grade Fund Admiral Shares), not happy about the outlook but I plan to stick with the same bond fund allocation in my AA. However, I stumbled on VTAPX (Short-Term Inflation-Protected Securities Index Fund Admiral Shares), and the returns seem to be far superior so far for the past 5, 3 and especially 1 year. What am I missing about this fund? Looks like a much better place to HIDE with what seems to be ahead on the Feds agenda, without bailing.

 

[jebmke]

So, your strategy is to sell low and buy high?

 

[RunningBum]

I went with VTAPX too. Research TIPS in general to see if they are for you. IMO they are a good hedge against inflation, and when you expect rising interest rates they should do better than bond funds. Certainly did last year. I also have VAIPX for longer term non-equities. What I am not sure of is how much of the fed's statements on rising interest rates are priced in.

At some point I will sell off maybe half of my TIPS funds and go back into regular bonds, when it seems interest rates have peaked or at least leveled off.

 

[RunningBum]

and btw, I started buying into VAIPX in July 2020. OldShooter had brought them up a few times, so I did my own research and agreed with it and bought in. He advocates for buying individual TIPS. I'm fine with the small expense hit of buying the fund.

 

[bpgdeg1234]

So, your strategy is to sell low and buy high?

This. A decent sized loss has already incurred in VFSUX over the past several months. I too have my short term bond holdings in this fund, so is it wise to exit this fund at this point to go to VTAPX that has already appreciated in value?

Perhaps it may be better to just stay the course or maybe even consider going with a 2 year nominal treasury bond to recoup the vast majority of losses to date within two plus years?

 

[mrfeh]

This. A decent sized loss has already incurred in VFSUX over the past several months. I too have my short term bond holdings in this fund, so is it wise to exit this fund at this point to go to VTAPX that has already appreciated in value?

Perhaps it may be better to just stay the course or maybe even consider going with a 2 year nominal treasury bond to recoup the vast majority of losses to date within two plus years?

+1

When I want/need to own a short term bond fund, VFSUX/VFSTX is my goto.

My TIPS are I Bonds and medium term FIPDX (Fidelity). They are both "buy and forget it" holdings.