VUSTX
VANGUARD LONG-TERM TREASURY FUND INVESTOR SHARES
Mentions (24Hr)
0.00% Today
Reddit Posts
Why does a U.S long-term treasury bond ($TLT, $VUSTX) smoothly go up regardless of the market condition and Fed rate?
Is there something I'm missing? Leverage ETFs seem great.
Rate My Portfolio! Meant for low risk and diversification with decent returns.
Mentions
\>IMO all treasury based bond funds are about the same. All the funds contain the same Treasury products Not exactly. Treasury bonds exist in a range of maturities between four weeks and 30 years. There are Treasury bond funds that target various maturity ranges. SGOV and VBIL are 0-3 month treasury bond funds with an average duration of 0.1 years. VUSTX is a long term bond fund with an average duration of 13.7 years. The duration effects how the fund NAV will react to prevailing interest rate changes. The effect is about the duration times the interest rate change. VUSTX will change 137 times as much as SGOV/VBIL. Because of rising interest rates this year VUSTX has lost 2.58% of total return even after dividend yield YTD. Since interest rate changes don't effect SGOV/VBIL as much VBIL has gained 2.4% in total return YTD with the dividend yield. Longer term bonds have a place in investing. An emergency fund is not the place.
At deepseek I cut all my IT thing in half, and parked that cash in VUSTX
>For a long time, I had a chunk invested in VUSTX Vanguard Long Term Treasury Fund. I took an overdue look at this, and it has done awfully, meaning negative returns. If you're looking at dividend reinvestment, that's only true over the last few years: https://totalrealreturns.com/n/VUSTX That's ok though, because stocks have been on a great run up. You need to look at risk and return on a total portfolio basis rather than individual components. At 55 you might want to start shifting into decreasing duration bonds. Normally folks do that by buying them directly, but you can also utilize https://www.ishares.com/us/strategies/bond-etfs/build-better-bond-ladders .
VUSTX has an average maturity of 20+ years with average duration of about 15+ years. The increase in yields is why you see a negative return. It's probably not the right bond product for you unless you want to have that constant duration. If you are not familiar with how bonds work - this is the primer that's usually recommended - [https://www.pimco.com/resources/education/everything-you-need-to-know-about-bonds](https://www.pimco.com/resources/education/everything-you-need-to-know-about-bonds) If you want to reduce your duration exposure - you probably ought to look at intermediate and shorter duration bond funds. Also - VUSTX is a treasury only bond fund. If you want higher yield - you will have to adjust the credit quality of your bond sleeve.
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
SGOV is one step away form a Money market fund. Good income in the moment, but not guarantee for more than a few weeks. I am in VGSH, VCSH, VCIT, VGIT, VWESX, and VUSTX - I am going for a mix of treasury and investment grade corporate bonds - some short term, some intermediate term, and some long term. I am about 50/50 Treasury/corporate and 25%, 60%, 15% short, intermediate, and long term
If you held VUSTX you'd be down 15% ytd, if you had bought qqq 37%. I know ytd isn't perfect but my point is that even while fighting inflation companies are going to price with inflation in mind.
A long term T-bond fund like VUSTX seems to be yielding 4.5%. These are bonds maturing in an average of 20 years. If real long term rates go back down to a little above 0%, this fund could gain 50% (the same way it lost ⅓ when rates went up). If rates stay high, then stocks will likely take a beating, not just because bonds are a competing safer investment, but because (artificially?) low rates were a driver of corporate profits for the last decade. If rates go up even more, bonds will go down further, but so will stocks. So I see a lot of downward pressure on stocks unless bond rates fall soon. In today's NYT, Krugman thinks that the bond market is overestimating long term rates (TIPS are paying 2.4% over inflation), which would mean it is underpricing long term bonds.
> Select vanguard total bond funds and compare to sp500 Here's VUSTX to VOO. https://i.imgur.com/8enXZnV.png
That's the leverage. VSGBX is cash, so -200% VSGBX represents financing 200% of your portfolio, paying cash rates, to buy VUSTX and some VFINX. In practice you would do that with futures.
You can buy and hold if you want. Backtests however show that hedging the levered asset would outperform on every metric: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=4&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=-1&benchmarkSymbol=VFINX&sameFees=true&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VFINX&allocation1_1=300&allocation1_2=165&symbol2=VSGBX&allocation2_1=-200&allocation2_2=-200&symbol3=VUSTX&allocation3_2=135
>The first is that many people > >don't > > panic despite downturns; the second is that the 10-20% bond allocation recommended for younger investors won't do very much to reduce their fear of a crash. These are both pretty silly, baseless claims IMO. First, it's well-documented that most investors vastly overestimate their tolerance for risk, only realizing so during a market crash when they panic sell. Secondly, asset allocation is not a function of age but rather of one's need, capacity, and tolerance for risk. 60/40 may very well be appropriate for a young risk-averse investor. [But even 80/20 can cut drawdowns](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&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&portfolioNames=true&portfolioName1=100%2F0&portfolioName2=80%2F20&portfolioName3=60%2F40&symbol1=VFINX&allocation1_1=100&allocation1_2=80&allocation1_3=60&symbol2=VUSTX&allocation2_2=20&allocation2_3=40) significantly, even more so with 60/40, as u/bmeisler noted. >"Everyone else's portfolio fell 50%, but due to my bond allocation, mine only fell 45%. So I'm totally not panicking like I would have if I were down 50%." Throwing around hypothetical, made-up numbers in support of your own argument isn't useful in any practical sense.
Sorry, I should have specified [2000-2020](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2020&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&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VFINX&allocation1_1=100&symbol2=VUSTX&allocation2_2=100). I've been using that "last 20 years" stat for a couple years and technically it's outdated now. Largely meaningless, of course, but some people are surprised to learn that stocks don't always beat bonds.
If you are expecting a disinflationary recession, which is the most common kind, then treasury funds like VUSTX would perform well, and it would also be relatively safe on the downside because it has positive expected long term return. A more aggressive play would be shorting the market, either by short selling market index funds like SPY, buying dedicated short funds like SH, or using options like puts on SPY. This kind of strategy would perform poorly if you are wrong, or if you are temporarily right but don't exit soon enough.
Good ETFs or mutual funds to invest in if I'm expecting a recession? Also, why would bond funds like VUSTX perform negatively?
>Well for instance if you started in 1998 and invested $1000 into SPY every month your portfolio wouldn't have outperformed VUSTX until 2013 and they'd be about even until 2016. Almost the same: [https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000&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=SPY&allocation1\_1=100&symbol2=VUSTX&allocation2\_2=100](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000&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=SPY&allocation1_1=100&symbol2=VUSTX&allocation2_2=100) ​ Historically (since the 80s at least) bonds tend to crash with market because interest rates tend to be high during the boom and the Fed cuts them when market/economy start crashing.
> But even if they bought at the top if they kept DCAing it would have taken far less than 12 years. Well for instance if you started in 1998 and invested $1000 into SPY every month your portfolio wouldn't have outperformed VUSTX until 2013 and they'd be about even until 2016.
When would that be? The last time the Feds fund rate was above 6% was in 2000. The Fed has actively been keeping rates low or cutting rates and long duration treasury funds (VUSTX) has lost money 5 out of the last 10 years, including a whopping -19% YTD.
VFINX (or SWPPX if you have a Schwab account), VUSTX (or SCHQ) long term treasuries, VGSH (SCHO), SCHP.
I can’t imagine it’s a better place for your money than VOO/VUSTX/whatever
True tho 100% TQQQ is dumb. LETFs are a great wealth-building tool if you have the right portfolio. Here is a link to my long-term portfolio: 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=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=3&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=1&leverageRatio=200.0&debtAmount=0&debtInterest=1.0&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=BRK.A&allocation1\_1=20&symbol2=FSCSX&allocation2\_1=20&symbol3=VFINX&allocation3\_1=20&symbol4=VUSTX&allocation4\_1=20&symbol5=%5EGOLD&allocation5\_1=20
Guys rate my portfolio, it's intended for low risk high returns. I'm using Pepsi to act as SCHD because it hasn't been around for long enough to back test to 1985. I'm also using GLD and VUSTX to lower max drawdowns. Link: https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2020&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=3500&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=Low+Risk+Retirement&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=BRK.A&allocation1\_1=30&symbol2=FSCSX&allocation2\_1=25&symbol3=VFINX&allocation3\_1=15&symbol4=PEP&allocation4\_1=10&symbol5=VUSTX&allocation5\_1=10&symbol6=%5EGOLD&allocation6\_1=10
[modern portfolio theory](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=3&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=1&leverageRatio=80.0&debtAmount=0&debtInterest=4.0&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=VFINX&allocation1_1=50&symbol2=VUSTX&allocation2_1=50)
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.
Yeah somebody else also pointed out VUSTX - thanks
Vanguard had a long-term treasury mutual fund as early as mid-1986. See its performance [here](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=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&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VUSTX&allocation1_1=100).
VUSTX incepted 1986 https://www.portfoliovisualizer.com/backtest-asset-class-allocation
Ok serious question here guys, is there a VIX equivalent for treasury bonds? There used to be a VXTNY but it closed last year. Need this for a hedge to a degen leveraged equity/bond port[here](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=10000&annualOperation=0&annualAdjustment=100&inflationAdjusted=true&annualPercentage=6.0&frequency=4&rebalanceType=3&absoluteDeviation=0.5&relativeDeviation=0.5&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=VGTSX&symbol2=VFINX&allocation2_1=275&allocation2_2=100&symbol3=VFISX&allocation3_1=1500&allocation3_2=750&symbol4=VFITX&allocation4_1=100&allocation4_2=50&symbol5=VUSTX&allocation5_1=150&allocation5_2=75&symbol6=CASHX&allocation6_1=-1925&allocation6_2=-875):
Yeah I mean TLT is typically inverse the indices. Not always. I used to hold TLT and VUSTX but historically 100% stocks is the way to go. If the stock market doesn’t drastically crash, you’ll almost certainly be missing out being in TLT. What you’re talking about here is playing the market. It might work out in your favor, but by all accounts (including the high inflation), the US and global economies are strong right now.