Re: Why BNDX (TOTAL INTL BD) has had better 5 year returns than BND (Total Bond Market ETF) despite lower SEC yield. Topic Author. The yield curve shows you the yield of bonds of different durations. New comments cannot be posted and votes cannot be cast, Press J to jump to the feed. Cookies help us deliver our Services. Archived. Investing. Cheers. Those funds you ask about 2 years duration and are short enough to be directly affected by each rate hike but not short enough to smoothly benefit from the higher rates like a <1 year ultrashort term fund would. Selling all BND to chase past returns of BNDX would not be the right choice in my opinion. johnsmithsf Posts: 53 Joined: Sat Jan 14, 2017 7:51 pm. Or is it likely that they will continue to drop? If you want greater stability than aggregate bonds, short term bonds like BSV or VGSH or ultrashort term bonds/money market like VMMXX would work better. Close. A bond's price change is linked to its yield and for a given change in yield, longer duration bonds change in price more. *13-Week Price Moves - 52 Week Price Change - quote-bot by echoapollo. Can anyone explain why that's not happening? On the other hand, if you show the chart with dividends you'll see that while the price is down, they're about even in total return now since they've had some time to digest the rising rates. But the performance for the past 2 years has been negative, even after factoring in the dividends. Of course, this is a phenomenal growth rate for bonds. But bonds of different durations do not all change yield in the same way, especially in response to known events like federal funds rate hikes. Short term bonds incorporate those gradually because future hikes only affect the end of their lifetime, while long term bonds will price them in and even outlive the forecastable rate cycle. VFIFX versus VTI, VXUS, BND, BNDX. BNDX is also less volatile than BND and experiences lower drawdowns. 4. No, you shouldn't sell because the yield of your safer funds rises. With interest rates expected to continue rising, is there any reason to expect BND and BNDX to eventually turn around sometime in 2019 and start rising? u/RBEnow. This is called flattening. Get answers to common ETF questions VFIFX versus VTI, VXUS, BND, BNDX. No, a target date fund with large amounts of equity is not a good replacement for an all bond allocation, if safety is your goal. Compare ETFs vs. mutual funds. Both BND and BNDX are ETFs. BND has a lower expense ratio than BNDX (0.04% vs 0.08%). I was using these as some of the "safe" ETF's in my portfolio. You can see that short term yields have risen much more than long term yields. By using our Services or clicking I agree, you agree to our use of cookies. Compare and contrast: BND vs BNDX. I'm tempted to replace them both with a Vanguard Target Retirement fund, which have a percentage of bonds but have not turned negative like the BND's. BNDX is up over any period longer than six months. I've been doing some self-education in the index investing arena recently and came across this article by Betterment's Dan Egan: 15. In terms of current income, BNDX has fallen way short compared to BND. BND vs. BNDX – Portfolio Final Balance. 3 years ago. $10,000 invested in BNDW would have resulted in $11,453 by now. Investing. BND has a lower 5-year return than BNDX (4.1% vs 4.41%). I've been holding $BND and $BNDX in a Vanguard IRA for a few years. The point is that although short term bonds don't move strongly, they are more correlated to cash interest rates. Posted by. Below is the comparison between BND and BNDX. Or is it likely that they will continue to drop? Currently, BNDX has an SEC yield of 0.93% vs. 3.13% for BND. With a rising-rate environment and increased volatility in the stock market, I would expect the opposite: that short-term bonds be on the rise. This equates to a compound annual growth rate of 8.95%. Overall, BNDX performs better than BND with a compound annual growth rate (CAGR) of 4.57% vs. 4.16%. Top. Gonna piggyback on OP's question for a related one: I was looking at the charts for $VFISX and $VBISX and I was surprised to see that they've been sliding down for all of 2018. With interest rates expected to continue rising, is there any reason to expect BND and BNDX to eventually turn around sometime in 2019 and start rising? Press question mark to learn the rest of the keyboard shortcuts. See how 9 model portfolios have performed in the past. Learn about BNDX with our data and independent analysis including price, star rating, asset allocation, capital gains, and dividends.

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