Given that disposition, I see why you'd feel that way about the SVF.Bond funds (both RBFGX and VBTLX) have this "duration risk" during which the principal value can fluctuate. Sometimes a lot (and I got burned badly by my supremely disastrous timing of moving to VBTIX, the institutional version of VBTLX, in my 401k plan, drumroll, in Jan-2021). I am chastened by that experience. With that experience behind me, if I were to have access to an SVF like yours, I'd be all over it.Huh. I've only been putting 10% of my fixed income allocation into it, because I've been expecting bond funds (mine is RBFGX not VBTLX but they're similar) to beat the SVF in the mid term future due to expected rate lowering. It seems like since 2022 has been a great time to buy bond funds as they're all near record lows.
But now you & exodusNH have me second-guessing this plan
You can have an approximate yield of 5% with your principal virtually guaranteed, or you can have a yield of 4.6% now with a LOT OF VOLATILITY as in the case of VBTLX where your principal is not safe at all. Your choice. I have made my biases known in these forums in the past. I will repeat my advice: "If I were you, @slondr, I would direct ALL my fixed income into this fund and forget VBTLX."
In my case, I'm putting money twice a month into my asset allocation and trying not to touch it after I do. I don't mind big drops as a result, because that just means I'm getting in cheap next month
Statistics: Posted by slondr — Mon Mar 11, 2024 6:31 pm — Replies 89 — Views 8208