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Another Poor Week for Bonds - AGG Down 2.5% YTD and Down 3.5% Since May Day
Though it was a poor week for the long end in bonds, the short end came out fine. The yield curve does not shift uniformly from one end to the other (nor in sync across different types of bonds with the same maturity).
MINT - up 0.02% for the week (ultra short taxable) BSV - up 0.06% (0.07% NAV) (short taxable) SHY - up 0.03% (0.02% NAV) (short Treas) VGSH - up 0.03% (short Gov)
FPNIX - up 0.19% MWUSX - up 0.02% (ultra short) DLSNX - up 0.03% (short term) DLTNX - up 0.03% (intermediate term)
Most of these funds are up YTD, and none is down 1% or more. DLTNX is worth noting because, as a total return fund, its portfolio spans (or is allowed to span) the entire range of domestic investment grade bonds. (The same could be said of other total return funds, like MWTRX, also up on the week though down 1.03% YTD.)
It might be worth checking whether AGG dropped because the long end dropped or because it is overweight in Treasuries (double the category average).
A minor technical question - your text says that AGG had a (small) distribution this week. The first numeric table (tables are all I really look at) says "total return", which means it incorporates (adjust for) distributions.
Does the YTD Growth graph also incorporate the distribution, or is it a pure price graph? And since we're on the subject of price, it's worth mentioning that this is market price data, not NAV figures (the YTD NAV of AGG was much worse, on the order of 1/2%). (I don't particularly care one way or the other since it averages out in the long term, but I do like to know what I'm looking at.)
Reply to @msf: Really good put msf. The term distribution in this case (a term I learned from Trader Flack) refers to a down day with higher than normal volume. Sorry for confusion.
The returns are total.
Absolutely, AGG is iShares Core Total U.S. Bond Market ETF index.
Comments
MINT - up 0.02% for the week (ultra short taxable)
BSV - up 0.06% (0.07% NAV) (short taxable)
SHY - up 0.03% (0.02% NAV) (short Treas)
VGSH - up 0.03% (short Gov)
FPNIX - up 0.19%
MWUSX - up 0.02% (ultra short)
DLSNX - up 0.03% (short term)
DLTNX - up 0.03% (intermediate term)
Most of these funds are up YTD, and none is down 1% or more. DLTNX is worth noting because, as a total return fund, its portfolio spans (or is allowed to span) the entire range of domestic investment grade bonds. (The same could be said of other total return funds, like MWTRX, also up on the week though down 1.03% YTD.)
It might be worth checking whether AGG dropped because the long end dropped or because it is overweight in Treasuries (double the category average).
A minor technical question - your text says that AGG had a (small) distribution this week. The first numeric table (tables are all I really look at) says "total return", which means it incorporates (adjust for) distributions.
Does the YTD Growth graph also incorporate the distribution, or is it a pure price graph?
And since we're on the subject of price, it's worth mentioning that this is market price data, not NAV figures (the YTD NAV of AGG was much worse, on the order of 1/2%). (I don't particularly care one way or the other since it averages out in the long term, but I do like to know what I'm looking at.)
The returns are total.
Absolutely, AGG is iShares Core Total U.S. Bond Market ETF index.
Here's a good summary: http://us.ishares.com/product_info/fund/overview/AGG.htm.
It comprises 24% bonds with duration 25 years and over, but 46% 5 years or less. Average duration is 7 years.