bond funds - VBMFX vs FGOVX

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Subject Author Date bond funds - VBMFX vs FGOVX ps56k 04-30-2009  Re: bond funds - VBMFX vs FGOVX Mark Freeland 04-30-2009  Re: bond funds - VBMFX vs FGOVX BreadWithSpam 04-30-2009  Re: bond funds - VBMFX vs FGOVX ps56k 04-30-2009  Re: bond funds - VBMFX vs CD's ps56k 07-22-2009
Posted by ps56k on April 30, 2009, 10:26 am I've been reading the threads about bond funds, and currently am holding VBMFX in my portfolio. What about FGOVX - http://finance.yahoo.com/q/bc?t=5y&s=FGOVX&l=on&z=m&q=l&c=vbmfx Why the divergence over the past year ? I've created some CD ladders, and was looking at other fixed income backstops to keep my hands from tinkering with the money.... -- ---------------------------------- "If everything seems to be going well, you have obviously overlooked something." - Steven Wright Posted by Mark Freeland on April 30, 2009, 11:14 am > I've been reading the threads about bond funds, > and currently am holding VBMFX in my portfolio. > > What about FGOVX - > http://finance.yahoo.com/q/bc?t=5y&s=FGOVX&l=on&z=m&q=l&c=vbmfx > > Why the divergence over the past year ? Likely flight to quality. Look at how low Treasury yields have sunk (and Treasury prices have risen). FGOVX isn't necessarily a Treasury fund, but it still holds government issues that may have categorically risen in price along with Treasuries. I haven't checked the data to confirm, though. Mark Freeland nNeEwTs@nyc.rr.com Posted by on April 30, 2009, 11:48 am > I've been reading the threads about bond funds, > and currently am holding VBMFX in my portfolio. > > What about FGOVX - > http://finance.yahoo.com/q/bc?t=5y&s=FGOVX&l=on&z=m&q=l&c=vbmfx > > Why the divergence over the past year ? Look at the assets inside the funds. We often talk here of asset allocation and asset classes and just treat "bond" or "fixed-income" as a thing unto itself. It's more complicated than that. Last year, US Treasury bonds rallied as everyone sold everything else in the universe and bought them. In the process the sold off not just stocks but also other kinds of fixed-income securities - especially corporates. VBMFX has a substantial portion invested in corporates and a smaller allocation to treasuries and agencies than does FGOVX. That's the main difference. FGOVX has no corporates at all. They are both in the highest grade securities, have average maturities on the order of 5 or so years (one just above that, one just below). -- Plain Bread alone for e-mail, thanks. The rest gets trashed. No HTML in E-Mail! -- http://www.expita.com/nomime.html Are you posting responses that are easy for others to follow? http://www.greenend.org.uk/rjk/2000/06/14/quoting Posted by ps56k on April 30, 2009, 1:39 pm > >> I've been reading the threads about bond funds, >> and currently am holding VBMFX in my portfolio. >> >> What about FGOVX - >> http://finance.yahoo.com/q/bc?t=5y&s=FGOVX&l=on&z=m&q=l&c=vbmfx >> >> Why the divergence over the past year ? > > Look at the assets inside the funds. We often talk here > of asset allocation and asset classes and just treat "bond" > or "fixed-income" as a thing unto itself. It's more > complicated than that. > > Last year, US Treasury bonds rallied as everyone sold > everything else in the universe and bought them. In the > process the sold off not just stocks but also other kinds > of fixed-income securities - especially corporates. > > VBMFX has a substantial portion invested in corporates and > a smaller allocation to treasuries and agencies than does > FGOVX. That's the main difference. FGOVX has no corporates > at all. They are both in the highest grade securities, have > average maturities on the order of 5 or so years (one just > above that, one just below). > Back in 2006, I was holding both Vanguard VFIIX (GNMA) and the LT Corp fund - VWESX. Didn't feel comfortable at the time, with the housing mess on the horizon. Sold them both - and put some into the index VBMFX, not sure where the rest went :) Looking back - wonder if I should have kept GNMA vs going to the bond index ? (selling the LT corp was probably a good move) http://finance.yahoo.com/q/bc?s=VFIIX&t=2y&l=on&z=m&q=l&c=vwesx,vbmfx,fgovx What about now and FGOVX - invest a portion in full treasuries, or it's a safety bubble ready to pop, as folks trickle back to equities ? Posted by ps56k on July 22, 2009, 11:58 pm > >> I've been reading the threads about bond funds, >> and currently am holding VBMFX in my portfolio. >> >> What about FGOVX - >> http://finance.yahoo.com/q/bc?t=5y&s=FGOVX&l=on&z=m&q=l&c=vbmfx >> >> Why the divergence over the past year ? > > Look at the assets inside the funds. We often talk here > of asset allocation and asset classes and just treat "bond" > or "fixed-income" as a thing unto itself. It's more > complicated than that. > > Last year, US Treasury bonds rallied as everyone sold > everything else in the universe and bought them. In the > process the sold off not just stocks but also other kinds > of fixed-income securities - especially corporates. > > VBMFX has a substantial portion invested in corporates and > a smaller allocation to treasuries and agencies than does > FGOVX. That's the main difference. FGOVX has no corporates > at all. They are both in the highest grade securities, have > average maturities on the order of 5 or so years (one just > above that, one just below). > with some of my ladder CD's maturing in the next couple of months, wondering what makes the most sense looking forward to the next year with respect to fixed income and stability - and keeping my hands from tinkering ? A - keep the money in CDs, but the term would be for 1 year - 2.05% B - take the money, and add to the VBMFX mutual fund - hold long term C - other :) Similar Threads Posted muni bond fund vs. "core" bond funds March 26, 2007, 10:46 am Good Bond Funds? January 28, 2007, 3:12 pm Bond index funds April 30, 2009, 5:12 am Moving IRA from stock to bond funds? April 20, 2007, 3:34 pm Bond Funds - Good Idea or Not November 13, 2008, 10:56 am Is now a good time to invest in Bond Funds? July 4, 2007, 8:36 am paper on emerging market bond funds February 4, 2008, 2:57 pm Build America Bonds in corporate bond funds December 10, 2009, 1:51 pm trading bond funds to avoid taxes on interest distributions February 2, 2009, 10:59 am sovereign wealth funds vs. hedge funds June 21, 2007, 4:06 pm