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Safe... I suppose so. As much as anything on this side of cash.
I have 2 years of spend in my taxable account in VWITX. I do know that VWITX has no Puerto Rico exposure, so that's a plus. On the bond side, I have absolutely no idea what is safe and what is not. If I can wring 1-3% out of a bond holding, I will be happy as a clam. I am glad that at this point, I don't look to bond income for my daily bread.
On the bond side, I have absolutely no idea what is safe and what is not.
@PRESSmUP Hey, in this asset space, welcome to the club! I mean, how does one (or can one) even begin to measure it? Other than noting the presence, or absence, of Ugly ...
For now credit risk in VWITX is low comparing to Oppenheimer exposure to PR bonds. Since rates are will definitely be higher in the future, duration risk still persist in higher rate environment, but it is still manageable unlike long-term mini funds. Having said that, there are only few years where the annual total returns turned negatives since 1994 (2014, -1.56%; 2008, -0.14%; 1999, -0.50%, and 1994, -2.12%) when the interest rates range between 0.25 to 6%.
In the 80's when the interest rates were in double digits, this fund did not fared nearly as well. Given low inflation (by Fed's definition) and slow economy, rate hike will likely to be gradual over the next few years, and I can live with these unknowns.
Comments
I have 2 years of spend in my taxable account in VWITX. I do know that VWITX has no Puerto Rico exposure, so that's a plus. On the bond side, I have absolutely no idea what is safe and what is not. If I can wring 1-3% out of a bond holding, I will be happy as a clam. I am glad that at this point, I don't look to bond income for my daily bread.
press
For now credit risk in VWITX is low comparing to Oppenheimer exposure to PR bonds. Since rates are will definitely be higher in the future, duration risk still persist in higher rate environment, but it is still manageable unlike long-term mini funds. Having said that, there are only few years where the annual total returns turned negatives since 1994 (2014, -1.56%; 2008, -0.14%; 1999, -0.50%, and 1994, -2.12%) when the interest rates range between 0.25 to 6%. In the 80's when the interest rates were in double digits, this fund did not fared nearly as well. Given low inflation (by Fed's definition) and slow economy, rate hike will likely to be gradual over the next few years, and I can live with these unknowns.