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Does anyone have any comments on the following mutual fund?
Vanguard Interm-Term Treasury Inv VFITX
I notice the Vanguard page has yield as 2.04 and Morningstar has 2.63. Does anyone know why the difference and which one is correct? If I invested, what yield would I receive?
Is it a "fairly stable" investment (not IRA) in this market?
unless you are prepared to stay at least 5 -7 years you could loose principal..
even if you do you may get a sub-par return if rates rise. getting 3% when everyone else is earning double that if rates go higher isnt a good feeling. like people earning double what you do at work for doing the same job.
as part of a balanced plan including gold,cash and stock i can see owning it although for that purpose i prefer the volatility of the the long term treasuries.
remember when you buy a bond mutual fund, you're not buying the yield or "interest" like if you were when investing in a bank CD or one individual bond. Yield's for bond mutual funds fluctuate. Think of it more like a stock mutual fund, where your total return is based on interest, principal & capital gains, and determined by how savvy the fund manager is in buying & selling.
Vanguard managers tend to be very conservative and generally don't swing for the fences to boost returns. Moreover Vanguard bond funds traditionally have some of the lowest expense ratios in the business, so even if your returns are paltry due to market conditions, you're not losing nickels & dimes to overpaid Wall St. investment advisors.
Which type of yield are you talking about, the SEC dividend or the annualized dividend? I think that may be the difference. A Vanguard rep. can go over that with you.
either one.. sec yield assumes bonds are held to maturity in the portfolio which they actually are not but the results are fairly close. i know for the fidelity intermediate treasury bond fund its 2.49% sec vs 2.99 actual. duration is 6.5 years . that means if rates rise 1% then you must stay put for at least 6.5 years so the additional interest offset the drop in principal so you get you origonal deal you signed on for or close to it..
Last edited by mathjak107; 01-14-2011 at 01:45 AM..
Does anyone have any comments on the following mutual fund?
Vanguard Interm-Term Treasury Inv VFITX
I notice the Vanguard page has yield as 2.04 and Morningstar has 2.63. Does anyone know why the difference and which one is correct? If I invested, what yield would I receive?
Is it a "fairly stable" investment (not IRA) in this market?
I don't think intermediate term treasuries are the way to go.
I like the Vanguard Short Term Bond Index or the Venguard Intermediate Term Bond Index better.
The difference in yield is the difference between the 30 day SEC yield I(which Vanguard uses) and the Trailing 12 month yield of the fund (which morningstar uses). I'm not 100% sure on this, but pretty sure.
it was really the fidelity one that got killed in 2008 .there was a reason they got creamed.fidelity had maintained a central core fund which was an internal mutual fund for use by fund managers . it held lots of that risky toxic paper it turned out . the conservative bond funds were using the central core fund to bolster their returns. they got caught holding that crap when it turned out to be toxic. all that stuff is now gone and the funds are back to normal.
i actually lost money in a money market that was holding lehmann paper. the reserve primary money market that was attached to my david lerner account. i lost a few cents on the dollar... not many people can make that claim.. im one of the lucky few who can acually say they lost in a money market.
it was really the fidelity one that got killed in 2008 .there was a reason they got creamed.fidelity had maintained a central core fund which was an internal mutual fund for use by fund managers . it held lots of that risky toxic paper it turned out . the conservative bond funds were using the central core fund to bolster their returns. they got caught holding that crap when it turned out to be toxic. all that stuff is now gone and the funds are back to normal.
i actually lost money in a money market that was holding lehmann paper. the reserve primary money market that was attached to my david lerner account. i lost a few cents on the dollar... not many people can make that claim.. im one of the lucky few who can acually say they lost in a money market.
According to Morningstar, FFRHX came in the 1st percentil in 2008, so that means they did a lot better than almost all the other ones, so I totally disagree:
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