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Explorer ○

Hello. I would greatly appreciate some advice please. I am 71 and retired on social security and a pension and my wife is 60 and works part time in her own business. We currently have about 45% of our total porfolio in equities and 55% in fixed income. Of the fixed income 65% is in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) in a Traditional IRA, 15% is in municipal bonds, 15% is in a stable value fund in a 403(b) and 5% is in a money market fund. We have no mortgage or debt and are able to presently meet all our expenses via social security, pension and wife's earnings. We have no children and do not necessarily wish to leave any inheritance. We prefer to keep our investment portfolio simple with a minimum number of funds.  

We wish to keep our investments with Vanguard but I am wondering if VBTLX is the best place for 65% of our fixed income. I am looking for a good investment stressing safety, diversification andI low expenses. Would our needs be bettered served moving some or all of that money into either or both of these other index funds such as Intermediate Term Bond Index Admiral Shares (VBILX) or Long Term Bond Index Admiral Shares (VBLAX) with a purchase fee of 0.50% or the actively managed Core Bond Admiral Shares (VCOBX) with an initial investment of $50,000?

Thanks very much in advance for your time and assistance.   

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Explorer ○

Re: Bond Portfolio Advice Please

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And a very timely article from Morningstar helping me to decide to keep that full VBTLX (BND) fixed income investment intact and not partially break it up into VBILX and/or other bond investments. Thanks again. 

https://www.morningstar.com/articles/992652/what-role-should-treasuries-play-in-a-portfolio

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Re: Bond Portfolio Advice Please

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I have compared VBILX (BIV) to VBTLX (BND) several times here. VBILX seems to have a slight advantage over all time periods. Hence I own VBILX / BIV. (But I also own FXNAX in a Fido account, which is almost the same as VBTLX, because that’s the best they have to offer.)

It makes no sense to pay a load for VBLAX when you can get BLV. I have thought about this, too, but decided against it. If you want to stress safety and simplicity, you probably don’t need the extra risk and volatility.

Cash is earning nothing now. My “cash” is in VBIRX. I see no reason to go “more conservative” than that. 

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Re: Bond Portfolio Advice Please

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I would stay away from LT bonds. You have your core FI ballast covered, but 1/3 of my portfolio in one fund makes me nervous. But it is similar to what Bogleheads would do.


@saabdued wrote:

Hello. I would greatly appreciate some advice please. I am 71 and retired on social security and a pension and my wife is 60 and works part time in her own business. We currently have about 45% of our total porfolio in equities and 55% in fixed income. Of the fixed income 65% is in Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) in a Traditional IRA, 15% is in municipal bonds, 15% is in a stable value fund in a 403(b) and 5% is in a money market fund. We have no mortgage or debt and are able to presently meet all our expenses via social security, pension and wife's earnings. We have no children and do not necessarily wish to leave any inheritance. We prefer to keep our investment portfolio simple with a minimum number of funds.  

We wish to keep our investments with Vanguard but I am wondering if VBTLX is the best place for 65% of our fixed income. I am looking for a good investment stressing safety, diversification andI low expenses. Would our needs be bettered served moving some or all of that money into either or both of these other index funds such as Intermediate Term Bond Index Admiral Shares (VBILX) or Long Term Bond Index Admiral Shares (VBLAX) with a purchase fee of 0.50% or the actively managed Core Bond Admiral Shares (VCOBX) with an initial investment of $50,000?

Thanks very much in advance for your time and assistance.   


 

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Explorer ○

Re: Bond Portfolio Advice Please

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Thanks very much chang and Gary1952. Appreciate the advice and comments.

I wonder if owning both VBTLX and VBILX would accomplish anything such as increasing diversification or would I then own many of the same bond investments in both funds? Still researching the issue.

Hoping to find someone to address VOCBX or would that fund be too risky when my sole quest is to find one of the safest all around total or core fixed income Vanguard funds to serve as the primary ballast in our overall portfolio. Many thanks again to anyone who may be able to address this. 

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Re: Bond Portfolio Advice Please

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@saabdued “I wonder if owning both VBTLX and VBILX would accomplish anything such as increasing diversification or would I then own many of the same bond investments in both funds? Still researching the issue.”

VBTLX is obviously a more diversified fund than VBILX - by sector as well as duration. Look at the M* portfolio breakdowns. I just prefer VBILX because it seems to have a slight performance edge over almost all time periods.

But I also own FXNAX, which is similar to VBTLX. (My holdings of FXNAX and VBILX / BIV are the largest in my portfolio.)

I don’t think you can get into too much trouble with any of these, risk-wise ... but don’t expect big yields. They serve as ballast for me—not income generators.

I don’t know anything about VCOBX. There have been a number of threads about “conservative bond funds” where I’m sure it has been mentioned at least Avogadro’s number of times. Personally I think cash-like bond funds are pointless, unless you’re going to invest 100% in one and you have only a few months or weeks left to live. I wouldn’t go any more conservative than VBIRX / BSV.

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VCORX/VCOBX is Vanguard's late entry [2016- ] into active intermediate-term core bond fund. It is a good non-indexed option but doesn't yet have long history as those from Fido, Loomis Sayles, Pimco, etc. It is not an ultra-short-term fund - that is VUBFX/VUSFX.

YBB
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Re: Bond Portfolio Advice Please

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VBTLX / BND is exactly where you want to be. Don't change it.

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@galeno wrote:

VBTLX / BND is exactly where you want to be. Don't change it.


Nope.  VBILX is more diversified.  VBTLX is mostly Gov+MBS high rated bonds.  VBILX is mostly treasuries + Corp high-rated bonds. VBILX has higher yield.  It can cope better with rising rates(Corp bonds).  Performance is better, Volatility is a bit higher but nothing to worry about.

See performance below.

vbtlx.PNG

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Re: Bond Portfolio Advice Please

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I agree with FD. 

Our "BND" uses 2 bond ETFs. 

Our FI = 50% US Treas + 40% Corps + 10% CASH.


@FD1001 wrote:

@galeno wrote:

VBTLX / BND is exactly where you want to be. Don't change it.


Nope.  VBILX is more diversified.  VBTLX is mostly Gov+MBS high rated bonds.  VBILX is mostly treasuries + Corp high-rated bonds. VBILX has higher yield.  It can cope better with rising rates(Corp bonds).  Performance is better, Volatility is a bit higher but nothing to worry about.

See performance below.

vbtlx.PNG


 

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Explorer ○

Re: Bond Portfolio Advice Please

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Good varied opinions and content to review. Thanks all. 

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@yogibearbull wrote:

VCORX/VCOBX is Vanguard's late entry [2016- ] into active intermediate-term core bond fund. It is a good non-indexed option but doesn't yet have long history as those from Fido, Loomis Sayles, Pimco, etc. It is not an ultra-short-term fund - that is VUBFX/VUSFX.


Oops maybe I was confusing VCOBX and FCONX ... but as I said, this is one I don’t know anything about. 

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Re: Bond Portfolio Advice Please

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And a very timely article from Morningstar helping me to decide to keep that full VBTLX (BND) fixed income investment intact and not partially break it up into VBILX and/or other bond investments. Thanks again. 

https://www.morningstar.com/articles/992652/what-role-should-treasuries-play-in-a-portfolio

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