VBMFX

srfdriver99

https://totalrealreturns.com/n/VFINX,VBMFX,USDOLLAR,MSFT?start=2000-01-01 Dividends included, MSFT broke even in 2014. By 2018, you were beating bonds.

hardcodedtwo

Vol like equities returns like bonds - not something to be too crazy about in a core mix https://totalrealreturns.com/s/VFINX,VBMFX,USDOLLAR,CEF — unless you’re macro trading. There’s some fed papers floating around showing it’s not great unless you have 100 year horizons and others that break down recent events like why it didn’t buffer in 2020 and why it held up in a more recent downturn. But yeah investment wise for a mix - does it hold value ? Does it have expected returns? Ok. Momentum trading strategies and whatnot can capture this upside somewhat but that’s a tax heavy and tricky space even in public funds. I think the managed futures strats are still underperforming due to chaos (although not sure about carry which is frequently used as a low correlation hedge)

srfdriver99

[Here is their information page.](https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&ticker=UDN) [Here is their prospectus.](https://connect.rightprospectus.com/Invesco/TVT/46141D104/P?site=ETF) If you don't understand where the dividend is coming from, you have no goddamn business touching this thing. I will be even blunter: this thing is [a steaming pile of shit and will just lose you money](https://totalrealreturns.com/s/VFINX,VBMFX,USDOLLAR,UDN). The actual target audience is not buying and holding this product. They dip into it for a day or a week to hedge forex trades or business transactions. It is one of those financial industry products that exists despite the fact that it is known to be a long term loser because it serves a purpose in short term transaction hedging. Do not touch this product. You are not the target audience, it is not for you, and you should not be "investing" in it. If you want to hedge against a "dollar collapse" 🙄 just do what everyone else that's worried about the "dollar collapse" does and buy precious metals or real estate or bitcoin or foreign stocks+bonds.

Im_Still_Here12

VBTLX has an average inflation adjusted return of [.38% per year since 2001](https://totalrealreturns.com/s/VBTLX) while VBMFX has an average inflation adjusted return of [2.24% since 87](https://totalrealreturns.com/s/VBMFX). At least VBMFX is somewhat respectable. >Either way everyone constantly compares bond funds to stock funds, that’s not the point of bonds >Either way everyone constantly compares bond funds to stock funds, that’s not the point of bonds If you want to deep freeze your money and barely beat inflation, then bonds are definitely the way to go I guess. I don't see the point in that myself. But to each his own.

DaemonTargaryen2024

Now do VBTLX since 01 or VBMFX since 86. Either way everyone constantly compares bond funds to stock funds, that’s not the point of bonds

AICHEngineer

You are correct that bond etfs are unlike straight bonds. Bond etfs effectively DCA the yield of whatever duration or segment theyre targeting. If yields are 5% right now on GOVZ, theyre buying bonds at 5%. If theyre 4% tomorrow, theyre buying 4%. Theyre continually rolling off old bonds and buying new ones at the new rates. However: Youre not making the connection between the changing risk free rate and the changing bond return premium. Post GFC we were in a super low risk free rate environment. From 2010 to 2017, the effective federal funds rate was zero and the 12-month CAGR on BND oscillated between 0 and 5% per. You cant look at the total CAGR start to finish of BND and compare that to todays fed funds rate. Bonds have had a huge drawdown due to rising rates, so any simple compound interest calculation is silly. Back in 1990-1995, BND (or VBMFX, older total bond market fund) was pushing 10-15% CAGR while the fed funds rate was cut from 10% down to 3%, and was then followed by a bond bear slump where CAGR went negative in 1995 as the fed raised rates. Personally, I dont buy the total bond market. I dont like how low duration risk it is, and I dont need the corporate bond exposure. But im just sharing how you should be evaluation these instruments. Bonds with duration have exposure to risk, and when the Fed does something ridiculous like hike 5% in a year for the fed funds rate, you get bonds losing value because newly issued bonds are at much more attractive yields. You have to discount existing bonds to match that yield. Going forward, all the bonds in the fund are priced at higher yields, so if new yields go down, the price of bond funds rise, like today. I just bought several thousand of long long duration debt via GOVZ yesterday (5x the volatility of BND, 26 yr duration vs 6 yr) and its up over 2% today because interest rates moved down a little bit.

donutsoft

I'm entirely in index funds, VTSAX, VTIAX and VBMFX. My retirement accounts are all in target date funds matching a similar asset allocation as what I have in my brokerage accounts. I'm a firm believer that investing should be boring, if you're having fun doing it then you're going to end up making some poor decisions eventually. It's easy to trick yourself into thinking you're a good investor during a bull market, but you'll be hung out to dry if you're trying to play those games during a downturn.

rfp314

Thanks for that! I’m glad to see at https://totalrealreturns.com/s/VFINX,VBMFX,USDOLLAR,VEGN it seems to keep pace (barely outpace) vfinx since inception! Makes me feel a bit less crazy to want to consider some exclusions while investing. The point of the thread was to be able to select my exclusions, ideally, but I would also love to know about other etfs where there is prison and weapons exclusions.

Me-Myself-I787

Warren Buffett, Charlie Munger and Nancy Pelosi. Maybe also Terry Smith, although he's only been around since the early 2010s so we don't yet know how his strategy will do in different market conditions. Some people also like Bill Ackman. Then there's also John Bogle aka Jack Bogle, founder of Vanguard and inspiration behind r/bogleheads, who mainly advocates for investing in index mutual funds which track the US market such as VFINX (which he created) because he thinks they will outperform vs actively-managed funds after fees in the long run. And there's also Peter Lynch, who ran a highly successful mutual fund back in the 90s. You can see how well Warren Buffett and Charlie Munger have done [here](https://totalrealreturns.com/s/VFINX,VBMFX,USDOLLAR,BRK-A) (they run BRK-A (ordinary people can invest in BRK-B which performs equally well and is run by the same people but hasn't been around as long which is why I used the graph for BRK-A instead)), and you can see how well Cathie Wood has done [here](https://totalrealreturns.com/s/VFINX,VBMFX,USDOLLAR,BRK-A,ARKK) (she runs ARKK).

mattsmith321

Portfolio Visualizer has nice drawdown stats. Take a look at this portfolio for VFINX (S&P500) which goes back to Jan 1977: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=6IgDlfpn0bIWcvb0SSr7M2 Then go to the Drawdowns tab. The Covid 19 stress period was the 5th largest drawdown and 2nd fastest recovery during that period. And while we are on the topic of drawdowns, take a look at the drawdowns for this portfolio backtest with VFINX, VUSTX (long term treasury), and VBMFX (bonds). The “safe” assets had their worse year in a long time. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=5V2VpiQkXSks60d2jlEsFu

Putrid_Pollution3455

Even the boglehead popular total bond market BND was 69.96 in 2008 and it's currently trading at 69.39...Vanguard's old and popular fund VBMFX, is at all time lows and below even the 2000 recession lows of 9.37 and it's now 9.11. Definitely due your own research, but tell me if you find the same conclusions. News outlets probably don't want to cause fear, we all heard that bonds got hammered in 2022 but 2023 is looking pretty horrible too! "BLV tracks a market value-weighted index of investment grade USD denominated government, corporate, and foreign debt and least 10 years to maturity." Number of holdings 2,999. There are other popular funds like TLT and EDV (20 year treasuries and 30 year bond fund respectfully.) These are VERY high duration risk and bonds in general are a very interesting animal. You can see that BLV is down 43.45% from it's all time high in August 2020.

brianmcg321

They are more pronounced because in that scenario I was withdrawing at the beginning of the year. If you did it monthly it would look much smoother. Here it is monthly: [Monthly withdrawals](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=300000&annualOperation=2&annualAdjustment=2500&inflationAdjusted=true&annualPercentage=0.0&frequency=2&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=ARCC&allocation1_1=20&symbol2=QQQ&allocation2_1=20&symbol3=SPY&allocation3_1=20&symbol4=O&allocation4_1=20&symbol5=BDC&symbol6=VBMFX&allocation6_1=20)

brianmcg321

Here is your portfolio run through portfolio visualizer withdrawing $30,000 per year starting in 2005. [Capitalismydog Portfolio](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=300000&annualOperation=2&annualAdjustment=30000&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=ARCC&allocation1_1=20&symbol2=QQQ&allocation2_1=20&symbol3=SPY&allocation3_1=20&symbol4=O&allocation4_1=20&symbol5=BDC&symbol6=VBMFX&allocation6_1=20)

TheEmpty

Thanks! My inexperience outside of a bull market (graduated uni 2015) is showing. Since I am hoping to retire in a few years (software engineer), got to keep this mind and really backtest some stuff from like 1999 to present. Do you think VTSMX and VBMFX would be a fair thing to use in [https://www.portfoliovisualizer.com/backtest-portfoli](https://www.portfoliovisualizer.com/backtest-portfoli) oh I see your link is to there too, I'll check out the tickers you used too. Thank you both for saving my ass!

ConsiderationRoyal87

VBMFX is the oldest passive total bond fund, with inception at the end of 1986.

ConsiderationRoyal87

VBMFX is the oldest share class of Vanguard’s total US bond fund. VTSMX is the oldest share class of Vanguard’s total US stock fund. The US doesn’t have total return funds, in the sense that you can view their price changes indicate their total return. Yahoo Finance’s adjusted close data (when you click on the Historical Data tab) gives you a very close approximation of the total return.

Meymo

Portfolio Visualizer. I've filled out an [example for you](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=1&annualAdjustment=1000&inflationAdjusted=true&annualPercentage=0.0&frequency=2&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=MSFT&allocation1_1=100) If you click that link and scroll down, you'll see that this shows a monthly contribution of $1,000 towards Microsoft, and you can see the growth over time. Click on the "monthly" tab to see the exact dollar amounts that are changing each month. You can replace MSFT with whatever fund you want (e.g. VTSMX, VBMFX, etc.). You can also select multiple securities/funds and see what the aggregate change is across a portfolio (so for example, you could do 60% VTSMX, 40% VBMFX + monthly contributions and see the outcome).

Days_End

That is very true; something like 60/40 SSO BND still has a solid CAGR lead on just VOO and only a 4% increase in max drawdown https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=2&startYear=1985&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&benchmark=VFINX&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SSO&allocation1_1=80&allocation1_2=70&allocation1_3=60&symbol2=VBMFX&allocation2_1=20&allocation2_2=30&allocation2_3=40&symbol3=VFINX

OppressedRed

VBMFX lost only 3.99% in the subprime crash… Today VBMFX has lost about 11% in the “rate and inflation increases of 2022”

RainbowMelon5678

you've pissed off the r/LETFs community also why the fuck do you keep calling them lefts? they're not lefts, they're letfs. you're wrong but I'm lazy and eating a cake at 6 am. hear what tatabusa and presumably others will say. Also, show me a time where VTI lost 49.99% in a day. that literally is not possible. what you're talking about in regards to volatility decay has nothing to do with leverage. And to add what Tatabusa said, here's a comparison between [simulated HFEA ](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2010&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=1&annualAdjustment=0500&inflationAdjusted=true&annualPercentage=0.0&frequency=2&rebalanceType=3&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=1&leverageRatio=200.0&debtAmount=0&debtInterest=3.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=true&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Bogleheads+Three+Funds&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VFINX&allocation1_1=55&symbol2=VUSTX&allocation2_1=45) and [Boglehead 3 fund portfolio ](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2010&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=1&annualAdjustment=0500&inflationAdjusted=true&annualPercentage=0.0&frequency=2&rebalanceType=3&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Bogleheads+Three+Funds&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTSMX&allocation1_1=50&symbol2=VGTSX&allocation2_1=30&symbol3=VBMFX&allocation3_1=20) during "the lost decade" where you DCA into simulated HFEA and a 3 fund boglehead portfolio. I wouldn't call it "significantly outperformed", but it did outperform on a risk-adjusted basis it seems. Zoom out even further and from 1997 (farthest back that 3 fund portfolio can go on PV) to 2022, and HFEA just leaves that 3 fund portfolio in the dust.