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BONDS The week that was.....W/E November 1, 2024.....Economy is HOT, Bond NAV's are NOT
@Crash, I don't think it is any more volatile than other funds in its category. Probably the same volatility, standard deviation, as your HY fund you hold now. I just meant it is more so than what I already hold, CSOAX, RSIIX, CBLDX, RPHYX. IGIB seems to trend along with Catch22's bond fund, BAGIX (a good bond fund imo), but I think has returned a bit more than BAGIX over time.
Two scenarios of outcome are possible, soft landing or hard landing (recession). In soft landing case, all bonds will do fine, whereas in recession junk bonds would fall like stocks. Only you as an investor can decide how to position your fixed income vehicles for the next 12 months.
BAGIX vs IGIB chart from January, 2007 to date (total returns)
IGIB is a corp. bond etf, with 99% exposure; whereas BAGIX has a 36% exposure to corp. bonds. BAGIX is mostly gov't and gov't related issues;; with the 63% shown as a percent of all holdings in the fund that are AAA, with the next 5 numbers representing the credit quality areas and 100% of the totals. IGIB doesn't have gov't. bond exposure. Below %'s are rounded.
IGIB AAA AA A BBB GOV'T 0% 5% 43% 52% 0% BAGIX 63% 3% 12% 22% 27% CORP = 36%
Glad to get the further input, all of you! I do hold two separate junk bond funds. Both TRP. Both very pleasing to me. PRCPX is much smaller than TUHYX, but still substantial within the portfolio. But it does seem sensible to me to convert one or the other into IGIB, soon. Here's hoping for a "soft landing."
BAGIX is a fine high-quality bond fund. It can be a good core fund for investors who would like to avoid significant drama in their fixed income holdings.
Thanks, @catch22 for the info. Yes, when I was looking to add income exposure over what I already had, I wanted an intermediate term investment grade corporate bond fund, so I know what I was adding. From what I read, junk or HY bonds are typically below a BBB rating.
Your trend chart shows what I was trying to say by comparing IGIB to a reputable strategic core bond fund like BAGIX - similar trends with similar volatility. Probably not a good comparison since the investment processes of the 2 are of course, very different.
My intention, at this time; is to present the data for the select bond sectors, as listed; through the end of the year (2024). This 'end date' will take us through the U.S. elections period, pending actions/legislation dependent upon the election results, pending Federal Reserve actions and market movers trying to 'guess' future directions of the U.S. economy. As important during this period, are any number of global circumstances that may take a path that is not expected; and/or 'new' circumstances. In the 'cooking pot' we currently have the big ingredients of the middle east and also, how much damage Ukraine may inflict upon Russia and the response.
W/E August 30, 2024..... A week of price swings with few + NAV's
Bond NAV's had many price swings through the week, with only a few on the list having a positive pricing week. *** I'm going to attempt to discover going forward, if there becomes any selling more directed towards the end of the week(s). A few numbers for your viewing pleasure.
FIRST:
*** UST yields chart, 6 month - 30 year. This chart is active and will display a 6 month time frame going forward to a future date. Place/hover the mouse pointer anywhere on a line to display the date and yield for that date. The percent to the right side is the percentage change in the yield from the chart beginning date for a particular item. You may also 'right click' on the 126 days at the chart bottom to change a 'time frame' from a drop down menu. Hopefully, the line graph also lets you view the 'yield curve' in a different fashion, for the longer duration issues, at this time. Save the page to your own device for future reference. NOTE: take a peek at the right side of this graph to find the yield swings of the past week, and for the current yields for the last business day.
For the WEEK/YTD, NAV price changes, August 26 - August 30, 2024
***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds/repo/SOFR rates; and ended the week at 5.16% yield. MMKT's yields remain basically unchanged for the past weeks. Fidelity's MMKT's continue to maintain decent yields, as is presumed with other vendors similar MMKT's.
--- AGG = -.52% / +3.18% (I-Shares Core bond), a benchmark, (AAA-BBB holdings) --- MINT = +.16% / +4.03% (PIMCO Enhanced short maturity, AAA-BBB rated) --- SHY = -.01% / +3.19% (UST 1-3 yr bills) --- IEI = -.29% / +3.2% (UST 3-7 yr notes/bonds) --- IEF = -.74% / +2.74% (UST 7-10 yr bonds) --- TIP = -.46% / +3.30% (UST Tips, 3-10 yrs duration, some 20+ yr duration) --- VTIP = -.04% / +3.79% (Vanguard Short-Term Infl-Prot Secs ETF) --- STPZ = -.12% / +3.71% (UST, short duration TIPs bonds, PIMCO) --- LTPZ = -1.52% / +2.04% (UST, long duration TIPs bonds, PIMCO) --- TLT = -1.93% / -.15% (I Shares 20+ Yr UST Bond --- EDV = -2.68% / -2.03% (UST Vanguard extended duration bonds) --- ZROZ = -2.73% / -3.52% (UST., AAA, long duration zero coupon bonds, PIMCO --- TBT = +3.90% / +5.70% (ProShares UltraShort 20+ Year Treasury (about 23 holdings) --- TMF = -5.77% / -12.71% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 2x version of EDV etf) *** Additional important bond sectors, for reference: --- BAGIX = -.49% / +3.54% Baird Aggregate Bond Fund (active managed, plain vanilla, high quality bond fund) --- LQD = -.86% / +3.12% (I Shares IG, corp. bonds) --- BKLN = +.67% / +5.23% (Invesco Senior Loan, Corp. rated BB & lower) --- HYG = -.08% / +4.29% (high yield bonds, proxy ETF) --- HYD = -.48%/+4.05% (VanEck HY Muni) --- MUB = -.42% /+1.05% (I Shares, National Muni Bond) --- EMB = -.45%/+6.51% (I Shares, USD, Emerging Markets Bond) --- CWB = +.20% / +4.00% (SPDR Bloomberg Convertible Securities) --- PFF = -.03% / +6.48% (I Shares, Preferred & Income Securities) --- FZDXX = 5.16% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022. (For reference to current date)
Comments and corrections, please. Remain curious, Catch
@catch22 — I’m curious as to why you only list bond ETFs (with a few exceptions) in this thread? Although the ETFs have low expenses, their performance doesn’t seem particularly noteworthy. My portfolio mainly has bond mutual funds (mostly Fidelity offerings) and their returns are almost all better than these ETFs, and I’m sure it would be easy to find many other bond mutual funds with better returns. Not being critical, just curious how you came up with this list
Hi@Tarwheel A good and fair question. The inclination to use the etf's, in the list, for bond fund performance, is the sector types represented, as well as their duration. Surely not a 'perfect' list, but allows for those viewing to perhaps have some ideas about bond(s) performance in the sectors relative to one another. Several of the listings are from requests. BUT, I have to keep the list to a manageable size. Even the NAV aspect is flawed when considering 'monthly distributions' and the affect upon a NAV price towards a 'month ending' number. And the fact that some of of etf's are active managed and/or have some 'special sauce' within the management style. I obtain and input all of the data manually, so my time allotment every week is limited, too. From a personal note, our portfolio is currently 60% income/cash. BAGIX is 33% of this, with the remainder being MMKT's. And though BAGIX is an intermediate duration fund, I can't really compare this to the etf, IEF; which is 7-10 year duration, but is a Treasury fund. BAGIX has only 27% in UST's. However, I try to have a view and perhaps find a 'trend' over a time period and a 'why?'. The inputs that affect the pricing comes from so many directions: flight to safety, a change in yields (for whatever reason), sovereign wealth funds and hedge funds using etf's. There are a lot of moving parts, eh?
NOTE: We do not chase funds for high yields (2008 exception); but do watch for opportunity in a falling yields environment to obtain the gains from pricing.
I made a one year chart (below). Not much value for the most part, as the two funds are bond indexes and one ETF all to the 'long duration' aspect.
You mentioned your having bond funds vs etf's. I'll be glad to build a chart, as I'm curious as to outcomes for active managed bond funds vs a similar category etf; although sometimes a difficult match. You're welcome to provide some tickers. Well, I've not likely really answered your question; and in the end; I'm just a curious person about 'stuff'. NOW, I must travel outside and alter the height of the grass in the lawn.
Thanks for the explanation. My biggest bond fund holding is FADMX, followed by FTBFX, FCNVX, PTIAX and FAGIX. I’ve stuck mostly to Fidelity funds for simplicity and ease in rebalancing. I also have a considerable number of CDs and Treasuries in ladders extending out 5 years. Now that interest rates are dropping, I’m reinvesting maturing issues into bond funds.
@Catch22 posting on ETFs are the benchmarks in which active funds are comparing to. Their up and down reveal the returns with respect to duration and credit quality. These are very useful metrics to track in 2022 with rising interest rates.
Core bond funds for example, tend to do a bit better from AGG/BND. Pimco uses derivatives to enhance and hedge their bond positions.
As someone who makes most of his money in bonds I never understood why look mostly at high rated bond funds. I want my funds to have a good risk/reward and the above don't do that. Higher-rated bonds have the highest correlation to rates with high volatility. More than a year ago I posted about 3 good funds managed by David K. Sherman RPHIX,CBLDX,RSIIX and can be held another 2 years while rates go down. The first one is the closest bond fund for a cash "sub". The other 2 are very good generic bonds with yield about 7-8% + low duration. This combo proved to be much better. See the chart (https://schrts.co/XqbrJhJz).
Every year I find plenty of opportunities, see a chart of THOPX,NVHIX/NVHAX,RSIVX/RSIIX,BND (https://schrts.co/bAbYcJwv) What is wrong with making 8+% in 2024 with low volatility?
BTW, the above is a good reason for me to hardly ever hold for years a typical HY bond fund. Again, high volatility + yield lower than CBLDX,RSIIX.
"As someone who makes most of his money in bonds I never understood why look mostly at high rated bond funds."
High quality bonds ("high rated" in your parlance), especially Treasuries, are excellent diversifiers for equity-heavy portfolios.
Let's test the above. In 2022 US Total bond index, BND, lost -13.1%. In the last 5 years BND lost money and "only" 12% behind MM, see chart of VMFMM,BND(https://schrts.co/SKsIYDBs) Remember, MM has no volatility. For 10 years BND made 1.6% annually = about 19% total (only 1.2% ahead of MM), and so much behind CPI about 32% which means you lost purchasing power. See (https://schrts.co/vQxnjdDG)
So, while treasuries are OK for decades for very simple portfolios, in the short term, the markets tell us where to be The above tells us that investing in treasuries in the last 5-10 years was not a great idea.
The Bloomberg Aggregate Bond Market Index, which BND tracks, dates back to 1976. Let's put this in perspective. Prior to 2022, the index experienced only four calendar year losses: 1994 - (-2.9%) 2013 - (-2.0%) 2021 - (-1.5%) 1999 - (-0.8%)
The Bloomberg Aggregate Bond Market Index's 13% loss in 2022 was, by far, its largest loss ever. The performance that year was highly irregular.
The Bloomberg Aggregate Bond Market Index, which BND tracks, dates back to 1976. Let's put this in perspective. Prior to 2022, the index experienced only four calendar year losses: 1994 - (-2.9%) 2013 - (-2.0%) 2021 - (-1.5%) 1999 - (-0.8%)
The Bloomberg Aggregate Bond Market Index's 13% loss in 2022 was, by far, its largest loss ever. The performance that year was highly irregular.
It was irregular. The following are not the "norm" either...losing twice 40-50% during 2000-2009 or BND making only 1.7% annually for 10 years or QQQ making over 1600% since 04/2009.
LT stats do not tell us about the markets ahead of us. If you join/avoid 1-2 of these, it can improve someone's portfolio by a lot. BTW, these are not weekly/monthly trades, some of them are years in the making.
My intention, at this time; is to present the data for the select bond sectors, as listed; through the end of the year (2024). This 'end date' will take us through the U.S. elections period, pending actions/legislation dependent upon the election results, pending Federal Reserve actions and market movers trying to 'guess' future directions of the U.S. economy. As important during this period, are any number of global circumstances that may take a path that is not expected; and/or 'new' circumstances. In the 'cooking pot' we currently have the big ingredients of the middle east and also, how much damage Ukraine may inflict upon Russia and the response.
W/E September 6, 2024..... Weak equity = +++ returns for quality bonds
--- With downward pressures, this week, in most equity sectors, quality bonds performed as would be expected, with very good price gains.
Bond NAV's had very good positive pricing through the 4 day week, with slight pull backs on Friday only. *** I'm going to attempt to discover going forward, if there becomes any selling more directed towards the end of the week(s). A few numbers for your viewing pleasure.
FIRST:
*** UST yields chart, 6 month - 30 year. This chart is active and will display a 6 month time frame going forward to a future date. Place/hover the mouse pointer anywhere on a line to display the date and yield for that date. The percent to the right side is the percentage change in the yield from the chart beginning date for a particular item. You may also 'right click' on the 126 days at the chart bottom to change a 'time frame' from a drop down menu. Hopefully, the line graph also lets you view the 'yield curve' in a different fashion, for the longer duration issues, at this time. Save the page to your own device for future reference. NOTE: take a peek at the right side of this graph to find the yield swings of the past week, and for the current yields for the last business day.
For the WEEK/YTD, NAV price changes, September 2 - September 6, 2024
***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds/repo/SOFR rates; and ended the week at 5.15% yield. MMKT's yields remain basically unchanged for the past weeks. Fidelity's MMKT's continue to maintain decent yields, as is presumed with other vendors similar MMKT's. Yields were down a few 100's of a percentage.
--- AGG = +1.25% / +4.47% (I-Shares Core bond), a benchmark, (AAA-BBB holdings) --- MINT = +.09% / +4.13% (PIMCO Enhanced short maturity, AAA-BBB rated) --- SHY = +.54% / +3.76% (UST 1-3 yr bills) --- IEI = +1.06% / +4.29% (UST 3-7 yr notes/bonds) --- IEF = +1.63% / +4.41% (UST 7-10 yr bonds) --- TIP = +.60% / +3.92% (UST Tips, 3-10 yrs duration, some 20+ yr duration) --- VTIP = +.27% / +4.06% (Vanguard Short-Term Infl-Prot Secs ETF) --- STPZ = +.33% / +4.05% (UST, short duration TIPs bonds, PIMCO) --- LTPZ = +1.55% / +3.62% (UST, long duration TIPs bonds, PIMCO) --- TLT = +3.51% / +3.36% (I Shares 20+ Yr UST Bond --- EDV = +4.86% / +2.73% (UST Vanguard extended duration bonds) --- ZROZ = +4.77% / +1.08% (UST., AAA, long duration zero coupon bonds, PIMCO --- TBT = -6.36% / -1.07% (ProShares UltraShort 20+ Year Treasury (about 23 holdings) --- TMF = +10.38% / -3.66% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 2x version of EDV etf) *** Additional important bond sectors, for reference: --- BAGIX = +1.31% / +4.69% Baird Aggregate Bond Fund (active managed, plain vanilla, high quality bond fund) --- LQD = +1.38% / +4.54% (I Shares IG, corp. bonds) --- BKLN = -.28% / +4.93% (Invesco Senior Loan, Corp. rated BB & lower) --- HYG = +.23% / +6.53% (High Yield bonds, proxy ETF) --- HYD = +.78%/+4.87% (VanEck HY Muni) --- MUB = +.70% /+1.75% (I Shares, National Muni Bond) --- EMB = +.21%/+6.73% (I Shares, USD, Emerging Markets Bond) --- CWB = +.20% / +4.00% (SPDR Bloomberg Convertible Securities) --- PFF = +.48% / +8.09% (I Shares, Preferred & Income Securities) --- FZDXX = 5.15% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022. (For reference to current date)
Comments and corrections, please. Remain curious, Catch
Thanks @Catch22 for the data. My bonds have done well this week. As I stated earlier, they are low hanging fruits comparing to that of tech stocks/funds, which is undergoing a sell off this week.
Glad I started a holding in WCPNX Weitz Core-Plus. It was the only thing in the portfolio which was UP on Friday. A bloodbath sort of day. Wish my holding in WCPNX were bigger. Still holding a lotta junk. Quite un-volatile. That aspect pleases me a great deal. IGIB may very well come in handy.
I’ve been trying hard to justify holding a bond fund. They come in so many different colors (junk, municipal, investment grade corp., mortgage backed, govt. backed, etc.) Throw in duration. That’s a lot to digest. I agree with @Observant1 that in a severe equity downturn govt. debt should rise. Look at the ‘08 record. Only the cream rose to the top in bondland then. Lesser quality got dinged.
Totally confused here. I never cared for bonds. But good quality bonds might do well for a year or two if we get a deep recession. From what I see of Blackrock’s head of fixed income, Rick Rieder, he still thinks bonds offer good value. Your thoughts going forward?
Look at multisector bond funds. These have sovereigns, corporates, HY, EMs - managers will allocate among these. More aggressive are LSBDX, PONAX / PIMIX (humongous), PYLD, BINC (you may have even mentioned it before), tamer middle-of-the-road FADMX. Expect more volatility than core or core-plus bonds.
Thanks Yogi. Some good suggestions. Will take a look. I’ve owned both BINC and PYLD for shorter periods in the past. The second one (PYLD) appears to have outperformed most of the pack recently.
$$$ I'm babysitting for a fellow is in a TRP acct, limited to TRP funds. If/when the time comes, I'll move him from junk TUHYX into global multi-sector PRSNX. Good performance history, there. We've both owned it in the past, too. I'm hoping to be able to just sit with my junk. There's been no crisis--- yet.
PRSNX is at the front side of the belly, 4.46 years. Yield is up to 5.04%, even as the fund has risen YTD by +4.63%.
My intention, at this time; is to present the data for the select bond sectors, as listed; through the end of the year (2024). This 'end date' will take us through the U.S. elections period, pending actions/legislation dependent upon the election results, pending Federal Reserve actions and market movers trying to 'guess' future directions of the U.S. economy. As important during this period, are any number of global circumstances that may take a path that is not expected; and/or 'new' circumstances. In the 'cooking pot' we currently have the big ingredients of the middle east and also, how much damage Ukraine may inflict upon Russia and the response.
W/E September 13, 2024..... NO report, due to having first time COVID We're both doing better since Monday and taking prescribed medications.
@catch22, We wish you a speedy recovery. Take lots of rest and fluid. Please seek medical attention right away if it does not improve within few days. I understand the anti-viral drugs are very effective but you have to request the prescription from your physician.
Every year I find plenty of opportunities, see a chart of THOPX,NVHIX/NVHAX,RSIVX/RSIIX,BND (https://schrts.co/bAbYcJwv) What is wrong with making 8+% in 2024 with low volatility?
FYI, John Miller has stepped down as the head of Nuveen’s municipal-bond investments, ending a nearly three-decade career at the money-management firm where he oversaw $188 billion and ran NVHAX and NHMAX, funds focused on high yield state and local government securities.
He is now the head of First Eagle's municipal bond shop and manages FDUAX and FEHAX since January 2, 2024.
Comments
BAGIX vs IGIB chart from January, 2007 to date (total returns)
IGIB is a corp. bond etf, with 99% exposure; whereas BAGIX has a 36% exposure to corp. bonds. BAGIX is mostly gov't and gov't related issues;; with the 63% shown as a percent of all holdings in the fund that are AAA, with the next 5 numbers representing the credit quality areas and 100% of the totals. IGIB doesn't have gov't. bond exposure. Below %'s are rounded.
It can be a good core fund for investors who would like to avoid significant drama in their fixed income holdings.
Your trend chart shows what I was trying to say by comparing IGIB to a reputable strategic core bond fund like BAGIX - similar trends with similar volatility. Probably not a good comparison since the investment processes of the 2 are of course, very different.
Bond NAV's had many price swings through the week, with only a few on the list having a positive pricing week. *** I'm going to attempt to discover going forward, if there becomes any selling more directed towards the end of the week(s). A few numbers for your viewing pleasure.
FIRST:
*** UST yields chart, 6 month - 30 year. This chart is active and will display a 6 month time frame going forward to a future date. Place/hover the mouse pointer anywhere on a line to display the date and yield for that date. The percent to the right side is the percentage change in the yield from the chart beginning date for a particular item. You may also 'right click' on the 126 days at the chart bottom to change a 'time frame' from a drop down menu. Hopefully, the line graph also lets you view the 'yield curve' in a different fashion, for the longer duration issues, at this time. Save the page to your own device for future reference. NOTE: take a peek at the right side of this graph to find the yield swings of the past week, and for the current yields for the last business day.
For the WEEK/YTD, NAV price changes, August 26 - August 30, 2024
***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds/repo/SOFR rates; and ended the week at 5.16% yield. MMKT's yields remain basically unchanged for the past weeks. Fidelity's MMKT's continue to maintain decent yields, as is presumed with other vendors similar MMKT's.
--- AGG = -.52% / +3.18% (I-Shares Core bond), a benchmark, (AAA-BBB holdings)
--- MINT = +.16% / +4.03% (PIMCO Enhanced short maturity, AAA-BBB rated)
--- SHY = -.01% / +3.19% (UST 1-3 yr bills)
--- IEI = -.29% / +3.2% (UST 3-7 yr notes/bonds)
--- IEF = -.74% / +2.74% (UST 7-10 yr bonds)
--- TIP = -.46% / +3.30% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
--- VTIP = -.04% / +3.79% (Vanguard Short-Term Infl-Prot Secs ETF)
--- STPZ = -.12% / +3.71% (UST, short duration TIPs bonds, PIMCO)
--- LTPZ = -1.52% / +2.04% (UST, long duration TIPs bonds, PIMCO)
--- TLT = -1.93% / -.15% (I Shares 20+ Yr UST Bond
--- EDV = -2.68% / -2.03% (UST Vanguard extended duration bonds)
--- ZROZ = -2.73% / -3.52% (UST., AAA, long duration zero coupon bonds, PIMCO
--- TBT = +3.90% / +5.70% (ProShares UltraShort 20+ Year Treasury (about 23 holdings)
--- TMF = -5.77% / -12.71% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 2x version of EDV etf)
*** Additional important bond sectors, for reference:
--- BAGIX = -.49% / +3.54% Baird Aggregate Bond Fund (active managed, plain vanilla, high quality bond fund)
--- LQD = -.86% / +3.12% (I Shares IG, corp. bonds)
--- BKLN = +.67% / +5.23% (Invesco Senior Loan, Corp. rated BB & lower)
--- HYG = -.08% / +4.29% (high yield bonds, proxy ETF)
--- HYD = -.48%/+4.05% (VanEck HY Muni)
--- MUB = -.42% /+1.05% (I Shares, National Muni Bond)
--- EMB = -.45%/+6.51% (I Shares, USD, Emerging Markets Bond)
--- CWB = +.20% / +4.00% (SPDR Bloomberg Convertible Securities)
--- PFF = -.03% / +6.48% (I Shares, Preferred & Income Securities)
--- FZDXX = 5.16% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022. (For reference to current date)
Comments and corrections, please.
Remain curious,
Catch
A good and fair question.
The inclination to use the etf's, in the list, for bond fund performance, is the sector types represented, as well as their duration.
Surely not a 'perfect' list, but allows for those viewing to perhaps have some ideas about bond(s) performance in the sectors relative to one another. Several of the listings are from requests. BUT, I have to keep the list to a manageable size.
Even the NAV aspect is flawed when considering 'monthly distributions' and the affect upon a NAV price towards a 'month ending' number.
And the fact that some of of etf's are active managed and/or have some 'special sauce' within the management style.
I obtain and input all of the data manually, so my time allotment every week is limited, too.
From a personal note, our portfolio is currently 60% income/cash. BAGIX is 33% of this, with the remainder being MMKT's. And though BAGIX is an intermediate duration fund, I can't really compare this to the etf, IEF; which is 7-10 year duration, but is a Treasury fund. BAGIX has only 27% in UST's.
However, I try to have a view and perhaps find a 'trend' over a time period and a 'why?'.
The inputs that affect the pricing comes from so many directions: flight to safety, a change in yields (for whatever reason), sovereign wealth funds and hedge funds using etf's. There are a lot of moving parts, eh?
NOTE: We do not chase funds for high yields (2008 exception); but do watch for opportunity in a falling yields environment to obtain the gains from pricing.
I made a one year chart (below). Not much value for the most part, as the two funds are bond indexes and one ETF all to the 'long duration' aspect.
You mentioned your having bond funds vs etf's. I'll be glad to build a chart, as I'm curious as to outcomes for active managed bond funds vs a similar category etf; although sometimes a difficult match. You're welcome to provide some tickers.
Well, I've not likely really answered your question; and in the end; I'm just a curious person about 'stuff'.
NOW, I must travel outside and alter the height of the grass in the lawn.
CHART 1 year FNBGX vs VBLAX vs EDV
Core bond funds for example, tend to do a bit better from AGG/BND. Pimco uses derivatives to enhance and hedge their bond positions.
More than a year ago I posted about 3 good funds managed by David K. Sherman
RPHIX,CBLDX,RSIIX and can be held another 2 years while rates go down. The first one is the closest bond fund for a cash "sub".
The other 2 are very good generic bonds with yield about 7-8% + low duration. This combo proved to be much better. See the chart (https://schrts.co/XqbrJhJz).
Every year I find plenty of opportunities, see a chart of THOPX,NVHIX/NVHAX,RSIVX/RSIIX,BND (https://schrts.co/bAbYcJwv)
What is wrong with making 8+% in 2024 with low volatility?
BTW, the above is a good reason for me to hardly ever hold for years a typical HY bond fund. Again, high volatility + yield lower than CBLDX,RSIIX.
why look mostly at high rated bond funds."
High-quality bonds ("high rated" in your parlance), especially Treasuries,
provide excellent diversification for equity-heavy portfolios.
In 2022 US Total bond index, BND, lost -13.1%.
In the last 5 years BND lost money and "only" 12% behind MM, see chart of VMFMM,BND(https://schrts.co/SKsIYDBs)
Remember, MM has no volatility.
For 10 years BND made 1.6% annually = about 19% total (only 1.2% ahead of MM), and so much behind CPI about 32% which means you lost purchasing power.
See (https://schrts.co/vQxnjdDG)
So, while treasuries are OK for decades for very simple portfolios, in the short term, the markets tell us where to be
The above tells us that investing in treasuries in the last 5-10 years was not a great idea.
Let's put this in perspective.
Prior to 2022, the index experienced only four calendar year losses:
1994 - (-2.9%)
2013 - (-2.0%)
2021 - (-1.5%)
1999 - (-0.8%)
The Bloomberg Aggregate Bond Market Index's 13% loss in 2022 was, by far, its largest loss ever.
The performance that year was highly irregular.
LT stats do not tell us about the markets ahead of us. If you join/avoid 1-2 of these, it can improve someone's portfolio by a lot.
BTW, these are not weekly/monthly trades, some of them are years in the making.
--- With downward pressures, this week, in most equity sectors, quality bonds performed as would be expected, with very good price gains.
Bond NAV's had very good positive pricing through the 4 day week, with slight pull backs on Friday only. *** I'm going to attempt to discover going forward, if there becomes any selling more directed towards the end of the week(s). A few numbers for your viewing pleasure.
FIRST:
*** UST yields chart, 6 month - 30 year. This chart is active and will display a 6 month time frame going forward to a future date. Place/hover the mouse pointer anywhere on a line to display the date and yield for that date. The percent to the right side is the percentage change in the yield from the chart beginning date for a particular item. You may also 'right click' on the 126 days at the chart bottom to change a 'time frame' from a drop down menu. Hopefully, the line graph also lets you view the 'yield curve' in a different fashion, for the longer duration issues, at this time. Save the page to your own device for future reference. NOTE: take a peek at the right side of this graph to find the yield swings of the past week, and for the current yields for the last business day.
For the WEEK/YTD, NAV price changes, September 2 - September 6, 2024
***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds/repo/SOFR rates; and ended the week at 5.15% yield. MMKT's yields remain basically unchanged for the past weeks. Fidelity's MMKT's continue to maintain decent yields, as is presumed with other vendors similar MMKT's. Yields were down a few 100's of a percentage.
--- AGG = +1.25% / +4.47% (I-Shares Core bond), a benchmark, (AAA-BBB holdings)
--- MINT = +.09% / +4.13% (PIMCO Enhanced short maturity, AAA-BBB rated)
--- SHY = +.54% / +3.76% (UST 1-3 yr bills)
--- IEI = +1.06% / +4.29% (UST 3-7 yr notes/bonds)
--- IEF = +1.63% / +4.41% (UST 7-10 yr bonds)
--- TIP = +.60% / +3.92% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
--- VTIP = +.27% / +4.06% (Vanguard Short-Term Infl-Prot Secs ETF)
--- STPZ = +.33% / +4.05% (UST, short duration TIPs bonds, PIMCO)
--- LTPZ = +1.55% / +3.62% (UST, long duration TIPs bonds, PIMCO)
--- TLT = +3.51% / +3.36% (I Shares 20+ Yr UST Bond
--- EDV = +4.86% / +2.73% (UST Vanguard extended duration bonds)
--- ZROZ = +4.77% / +1.08% (UST., AAA, long duration zero coupon bonds, PIMCO
--- TBT = -6.36% / -1.07% (ProShares UltraShort 20+ Year Treasury (about 23 holdings)
--- TMF = +10.38% / -3.66% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 2x version of EDV etf)
*** Additional important bond sectors, for reference:
--- BAGIX = +1.31% / +4.69% Baird Aggregate Bond Fund (active managed, plain vanilla, high quality bond fund)
--- LQD = +1.38% / +4.54% (I Shares IG, corp. bonds)
--- BKLN = -.28% / +4.93% (Invesco Senior Loan, Corp. rated BB & lower)
--- HYG = +.23% / +6.53% (High Yield bonds, proxy ETF)
--- HYD = +.78%/+4.87% (VanEck HY Muni)
--- MUB = +.70% /+1.75% (I Shares, National Muni Bond)
--- EMB = +.21%/+6.73% (I Shares, USD, Emerging Markets Bond)
--- CWB = +.20% / +4.00% (SPDR Bloomberg Convertible Securities)
--- PFF = +.48% / +8.09% (I Shares, Preferred & Income Securities)
--- FZDXX = 5.15% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022. (For reference to current date)
Comments and corrections, please.
Remain curious,
Catch
Totally confused here. I never cared for bonds. But good quality bonds might do well for a year or two if we get a deep recession. From what I see of Blackrock’s head of fixed income, Rick Rieder, he still thinks bonds offer good value. Your thoughts going forward?
PRSNX is at the front side of the belly, 4.46 years. Yield is up to 5.04%, even as the fund has risen YTD by +4.63%.
Compare TUHYX: domestic junk. YTD +6.04%, but in the bottom half of category... Yield = 7.41%. Scrumptious.
https://www.morningstar.com/funds/xnas/prsnx/quote
https://www.morningstar.com/funds/XNAS/TUHYX/quote
We're both doing better since Monday and taking prescribed medications.
FYI, John Miller has stepped down as the head of Nuveen’s municipal-bond investments, ending a nearly three-decade career at the money-management firm where he oversaw $188 billion and ran NVHAX and NHMAX, funds focused on high yield state and local government securities.
He is now the head of First Eagle's municipal bond shop and manages FDUAX and FEHAX since January 2, 2024.
that's good info. Last week, NVHAX lost 1.3% and NHMAX -0.95% while other HY Munis made money.