I keep Total Bond Institutional class in the 401k and have been rebalancing into it in early retirement. RMDs are about a dozen years out so I am not planning to tap from VBTIX for a while. I will on occasion pick up Vanguard’s CA tax-exempt longs when people put them on sale. The Roth account tiny percent does not get touched.This is pretty interesting.
My only bonds are t-bills and TIPS at this point.
So are is all of your bond allocation in muni’s held in taxable? How have your 3 funds performed during large equity market downturns? Why 3 different durations?
I have plenty of diversification in the bond portion of the portfolio utilizing the three account types:
• 10.44% VCLAX CA Long-term tax-exempt (taxable)
• 3.65% VCADX CA Intermediate tax-exempt (taxable)
• 2.82% STAR Core Bond through STAR balanced fund (taxable)
• 7.69% VBTIX Total Bond Institutional (tax-deferred 401k)
• 1.16% inside the VWENX Wellington balanced fund (Roth)
Municipal MMFs will fluctuate in yield quite a bit, but that is expected. The municipal bond funds perform just like any other bond fund, and they have seen a few instances of short-lived price retraces when the municipal sector comes into focus by the doomsdayers. Now that I have been retired for seven years the bond funds in taxable have the income distributions go to cashflow. It works great.
How much have I lost investing solely in CA municipal tax-exempt funds in 30 years? CA is the drama queen of states when it comes to financial or fiscal “crises” as they are seasonal like our natural disasters. Even with three cities that went bankrupt, and the occasional IOU or payment warrants issued by the state, I have never been delayed or shorted a dime on the income or realized a loss of a cent on principal.
Statistics: Posted by Hacksawdave — Sun Feb 08, 2026 2:26 pm — Replies 21 — Views 1489