FLAAX

0905-15

Interesting, thanks. I mean, I’ve been in FLAAX for 7 years and that’s over 15% unrealized losses. The other fund is less. I don’t see it necessarily jumping in the next couple of years. It feels like the fund has been “when the market goes up, it goes down and when the market goes down it goes down”

lufisraccoon

It will end up positive, it just takes time - that's what the duration metric measures on bonds. Higher duration means higher price drops from interest rate increases, and longer time to recover from those price drops. FLAAX has 9 years duration so you have some time to go assuming interest rates remain constant. *Right now*, higher duration doesn't have much higher yield than shorter duration (is the duration premium is low). However, that's not historically common. It's fine to dislike duration, you just have to accept that if you go for shorter duration you will not be able to have your current bonds recover over time, and you'll accept lower returns overall. For an emergency fund, that's not necessarily a bad price to pay.