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I have held WATFX- Western Asset Core and now looking at another VTEB -Vanguard Tax-Exempt Bond Index Fund ETF. I can hold both in either IRA or/and taxable account. I would appreciate any comments on what to consider or hold both.
What are your other bond holdings, if any? What is your risk tolerance? What are you trying to accomplish? Diversity? Total Return? Income? Is this for a Fido, VG, other a/c? You'd need to provide at least some additional info to get a credible answer.
In general, tax-exempts (“muni’s”) are not a good fit for IRAs (or other tax-deferred/-free accounts like 401/403(x)). VTEB is generally best in a taxable account.
I own WATFX only in IRA. Desire Income, Diversity and don't own any other bond funds. I am 87 with 85 year old wife. Now renting in Four Seasons Apt in Beachwood, Ohio. Have Schwab accounts. Only have one taxable joint account, rest IRA and Roth.
WATFX is a good fund, but since it has a decent amount of duration risk, a short-duration fund like RPHYX might be an acceptable complement to it. At 87, you probably shouldn't be taking on too much risk and RPHYX though it isn't a high income fund has strong downside protection and almost nil duration risk. SUBFX might be another interesting choice as it hedges out duration risk.
Greetings from Cleveland Heights, Ron! I have WATFX, as well as SUBFX as suggested by Lewis. Frankly, I've reduced my US bond holdings dramatically given the prospects of rising rates, and am generating yield from other holdings primarily from REITs, equity and preferred CEFs and EM bonds..but the risk is certainly higher no doubt.
By the way, have you spoken to the guys at Schwab at Legacy Village about your question?
PRSNX, PTIAX, RPSIX. Age 66. I suppose I'm using it all as ballast, since I'm still re-investing all profit. Medium risk tolerance (?) Investing mostly for heirs. If it can be called a strategy in the portfolio overall: I take a small chunk (approx 2.2% of total) from the balance each year, assuming the Market is not falling. Unless in the middle of a correction or a bear, it's a pretty safe bet that I'll make up that amount, and maybe even more, by the end of each year... I was late to the party with PTIAX: per-share monthly divs HAD been in double digits. No more. RPSIX is a fund full of TRP bond funds. It will always be "fair to middling," at best. That one and PRSNX offer respectable monthlies--- normally 3 cents plus a fraction. (Not so, in January, 2021.) I have no use for arbitrage or long/short or leveraged or short-term anything. I like to spend time babysitting and observing my portfolio. I don't want to have to always be bird-dogging it at every moment.
Crash, I have looked over and thought a couple of your suggestions looked ok and better than what I have. I found that RPHYX, SUBFX,RPSIX, were all better if they maintain it. The Vanguard VTEB although tax free still looks good even in the IRA where we don't need tax free. I'll keep following and hope to consider one of these.
LewisBraham I meant to include you when I sent a reply to Crash. Seems I have enough ideas also suggested by you. I also thinking of using an international fund VXUS to include with the Bond funds since It's a fairly large amount.
Why? Not seeing any reason to prefer it [SUBFX] to say FTBFX over the last 5-4-3-2-1y
The OP appears to be looking for a fund in addition to WATFX.
If the question were one of merely replacing WATFX, it's hard to see any reason to choose FTBFX, with its very close performance and volatility. FTBFX does have a somewhat shorter effective duration but that is offset by its lower average credit quality.
When it comes to complementing WATFX, there's no comparison between SUBFX and FTBFX. Over the suggested timeframe (2013-now), WATFX and FTBFX have a correlation coefficient of 0.97 (hence R² of 0.94), while WATFX and SUBFX have a correlation coefficient of 0.47 (R² of 0.22). SUBFX is by far the better diversifier.
There's also a middle ground. For the management skills of SUBFX in a somewhat more sedate package, i.e. core plus, but one that still offers more diversification and better performance than FTBFX, there's SCPZX. The correlation coefficient between WATFX and SCPZX is 0.83 (R² of 0.69) over the same 2013+ time frame.
Was responding to RFC for 'best choice for a large holding in an IRA' only, performance, no other contexts; and 'say' indicates just one of many, not particular advocacy.
Comments
What is your risk tolerance?
What are you trying to accomplish? Diversity? Total Return? Income?
Is this for a Fido, VG, other a/c?
You'd need to provide at least some additional info to get a credible answer.
By the way, have you spoken to the guys at Schwab at Legacy Village about your question?
Chart
SUBFX vs FTBFX, just a quick performance check for total return, nothing else inferred to risk or otherwise
If the question were one of merely replacing WATFX, it's hard to see any reason to choose FTBFX, with its very close performance and volatility. FTBFX does have a somewhat shorter effective duration but that is offset by its lower average credit quality.
When it comes to complementing WATFX, there's no comparison between SUBFX and FTBFX. Over the suggested timeframe (2013-now), WATFX and FTBFX have a correlation coefficient of 0.97 (hence R² of 0.94), while WATFX and SUBFX have a correlation coefficient of 0.47 (R² of 0.22). SUBFX is by far the better diversifier.
Portfolio Visualizer correlation matrix
There's also a middle ground. For the management skills of SUBFX in a somewhat more sedate package, i.e. core plus, but one that still offers more diversification and better performance than FTBFX, there's SCPZX. The correlation coefficient between WATFX and SCPZX is 0.83 (R² of 0.69) over the same 2013+ time frame.