I'm not following.ribonucleic wrote: ↑Wed Jan 27, 2021 1:39 pm the economy heats up so fast that Yellen has to do some braking?
Yellen is head of the Treasury.
What braking is she supposed to do in her role?
I'm not following.ribonucleic wrote: ↑Wed Jan 27, 2021 1:39 pm the economy heats up so fast that Yellen has to do some braking?
I am thinking I-bonds can make sense even for short term savings. We have a small taxable savings account earning 0.5%. If I move that $10-20K to I-bonds after May 1, that will earn over 1% in the first 6 months based on the annualized rate of 2.1%+. Then even if it earns 0% for the second six months and I cash it in after 1 year, I will have a return of at least 1% for the year even with the 3 month penalty.anon_investor wrote: ↑Sun Apr 11, 2021 6:25 amThe current composite rate guaranteed for 6 months is 1.68%. The estimated composite rate for 6 months starting May 1 is 2.1%+. So if you bought today you would get 6 months at 1.68% and then 6 months at 2.1%+. So if you bought today, for 12 months you would likely get 1.89%+, which is amazing for anything that has 0 risk (no interest rate risk, no credit risk).
FYI it looks like I Bonds purchased from May-Oct 2021 will earn 3.53% for the first 6 months. This makes I Bonds purchased during that time period a pretty darn good deal!jeffyscott wrote: ↑Tue Apr 13, 2021 7:37 amI am thinking I-bonds can make sense even for short term savings. We have a small taxable savings account earning 0.5%. If I move that $10-20K to I-bonds after May 1, that will earn over 1% in the first 6 months based on the annualized rate of 2.1%+. Then even if it earns 0% for the second six months and I cash it in after 1 year, I will have a return of at least 1% for the year even with the 3 month penalty.anon_investor wrote: ↑Sun Apr 11, 2021 6:25 amThe current composite rate guaranteed for 6 months is 1.68%. The estimated composite rate for 6 months starting May 1 is 2.1%+. So if you bought today you would get 6 months at 1.68% and then 6 months at 2.1%+. So if you bought today, for 12 months you would likely get 1.89%+, which is amazing for anything that has 0 risk (no interest rate risk, no credit risk).
In addition, I can actually buy late in May, say May 25, and then sell May 1, 2022 and earn that 1% in about 49 weeks. As an added bonus I would pay only 12% Federal income tax on the earnings, instead of nearly 20% combined Fed and State.
I would give up the liquidity of the savings account for the initial ~49 weeks, but being retired and old enough that does not really matter to me, as we can access all of our money at any time.
Well, that means I am certain to make that move. I got the latest tipswatch email with that info shortly after your post. That makes it about 1.75% as the guaranteed minimum return for the first year. At my state income tax rate, that's like getting a 1 year CD at 2%.anon_investor wrote: ↑Tue Apr 13, 2021 8:38 amFYI it looks like I Bonds purchased from May-Oct 2021 will earn 3.53% for the first 6 months. This makes I Bonds purchased during that time period a pretty darn good deal!jeffyscott wrote: ↑Tue Apr 13, 2021 7:37 amI am thinking I-bonds can make sense even for short term savings. We have a small taxable savings account earning 0.5%. If I move that $10-20K to I-bonds after May 1, that will earn over 1% in the first 6 months based on the annualized rate of 2.1%+. Then even if it earns 0% for the second six months and I cash it in after 1 year, I will have a return of at least 1% for the year even with the 3 month penalty.anon_investor wrote: ↑Sun Apr 11, 2021 6:25 amThe current composite rate guaranteed for 6 months is 1.68%. The estimated composite rate for 6 months starting May 1 is 2.1%+. So if you bought today you would get 6 months at 1.68% and then 6 months at 2.1%+. So if you bought today, for 12 months you would likely get 1.89%+, which is amazing for anything that has 0 risk (no interest rate risk, no credit risk).
In addition, I can actually buy late in May, say May 25, and then sell May 1, 2022 and earn that 1% in about 49 weeks. As an added bonus I would pay only 12% Federal income tax on the earnings, instead of nearly 20% combined Fed and State.
I would give up the liquidity of the savings account for the initial ~49 weeks, but being retired and old enough that does not really matter to me, as we can access all of our money at any time.
Perhaps they have a floating rate or are likely to be called? I would assume the ETF will have a distribution of effective maturities and durations that are similar to their ultrashort mutual fund.chem wrote: ↑Tue Apr 13, 2021 8:01 am looking at VUSB's holdings has some surprises:
https://advisors.vanguard.com/investmen ... #portfolio
an "ultra short term" bond ETF whose top 4 holdings mature in 2024, 2024, 2026, and 2029.
for comparison, the LATEST maturity in ICSH's top 10 holdings is 2023.
https://www.ishares.com/us/products/258 ... income-etf
I wish vanguard would publish analytics about VUSB's portfolio. it might not be what people expect.
The average duration is what really matters.chem wrote: ↑Tue Apr 13, 2021 8:01 am looking at VUSB's holdings has some surprises:
https://advisors.vanguard.com/investmen ... #portfolio
an "ultra short term" bond ETF whose top 4 holdings mature in 2024, 2024, 2026, and 2029.
for comparison, the LATEST maturity in ICSH's top 10 holdings is 2023.
https://www.ishares.com/us/products/258 ... income-etf
I wish vanguard would publish analytics about VUSB's portfolio. it might not be what people expect.
that could be the case, yes. the ETF is not stated to be the same underlying fund as the mutual funds, though, and the mutual funds' EOY portfolio has bonds with actual short maturities (nothing maturing in 2024+ topping THOSE lists).jeffyscott wrote: ↑Tue Apr 13, 2021 9:23 amPerhaps they have a floating rate or are likely to be called? I would assume the ETF will have a distribution of effective maturities and durations that are similar to their ultrashort mutual fund.chem wrote: ↑Tue Apr 13, 2021 8:01 am looking at VUSB's holdings has some surprises:
https://advisors.vanguard.com/investmen ... #portfolio
an "ultra short term" bond ETF whose top 4 holdings mature in 2024, 2024, 2026, and 2029.
for comparison, the LATEST maturity in ICSH's top 10 holdings is 2023.
https://www.ishares.com/us/products/258 ... income-etf
I wish vanguard would publish analytics about VUSB's portfolio. it might not be what people expect.
https://investor.vanguard.com/mutual-fu ... olio/vubfx
well, that's not entirely true. a fund of 66/33 4-week t-bills and 30-year t-bonds will be distinguishable from a fund of just 10-year notes. but I get your drift.watchnerd wrote: ↑Tue Apr 13, 2021 9:46 amThe average duration is what really matters.chem wrote: ↑Tue Apr 13, 2021 8:01 am looking at VUSB's holdings has some surprises:
https://advisors.vanguard.com/investmen ... #portfolio
an "ultra short term" bond ETF whose top 4 holdings mature in 2024, 2024, 2026, and 2029.
for comparison, the LATEST maturity in ICSH's top 10 holdings is 2023.
https://www.ishares.com/us/products/258 ... income-etf
I wish vanguard would publish analytics about VUSB's portfolio. it might not be what people expect.
You could combine those longer holdings with a bunch of T-bills and drop the average duration dramatically.
I'm frankly astonished that so many people are seeking actively-managed, ultra-short-term bond ETFs when interest rates are so low.calwatch wrote: ↑Fri Jul 09, 2021 8:37 pm ETF.com has a three month retrospective: https://www.etf.com/sections/features-a ... newest-etf
Already has over $1 billion in assets and is the ninth largest fund in the ultra short term category. The leaders are JPST, SHV, BIL, ICSH, GSY, GBIL, BSCL, and IBDM. BSCL and IBDM are just the short dated defined maturity bond funds that are gradually headed towards their expiration.
My son prefers simplicity over all, and wanted something like a High Yield Savings account to build emergency/next car funds that he will likely only tap every few years. He has two financial institutions, a credit union and Vanguard. The CU has not very attractive CD or savings rates, but top notch every day banking institution. He chose an ultra-short-bond fund for that fund. So far he has done about as well as I have done with a mix of HYSA and no-penalty CDs at Ally and it is way less work for him.UpperNwGuy wrote: ↑Sat Jul 10, 2021 9:13 pm I'm frankly astonished that so many people are seeking actively-managed, ultra-short-term bond ETFs when interest rates are so low.
I can understand the desire for simplicity. In 2019 and prior I had all my emergency/next car/next vacation funds in Vanguard's Prime Money Market Fund, and it was simple and easy to manage. Now my funds are in a more complicated mix of high yield savings and certificates of deposit — the opposite of simplicity.retiringwhen wrote: ↑Sat Jul 10, 2021 9:20 pmMy son prefers simplicity over all, and wanted something like a High Yield Savings account to build emergency/next car funds that he will likely only tap every few years. He has two financial institutions, a credit union and Vanguard. The CU has not very attractive CD or savings rates, but top notch every day banking institution. He chose an ultra-short-bond fund for that fund. So far he has done about as well as I have done with a mix of HYSA and no-penalty CDs at Ally and it is way less work for him.UpperNwGuy wrote: ↑Sat Jul 10, 2021 9:13 pm I'm frankly astonished that so many people are seeking actively-managed, ultra-short-term bond ETFs when interest rates are so low.
I hold the Ultra Short Term Bond Fund due to it's duration in a tax deferred account. The Short Term Investment Grade fund's duration is just under 3 times higher but the yield is 2 1/4 times higher, I hold that in a tax deferred account also but the duration is higher than I like. There is no winning in fixed income, when rates rise the duration will be an issue.UpperNwGuy wrote: ↑Sat Jul 10, 2021 9:13 pmI'm frankly astonished that so many people are seeking actively-managed, ultra-short-term bond ETFs when interest rates are so low.calwatch wrote: ↑Fri Jul 09, 2021 8:37 pm ETF.com has a three month retrospective: https://www.etf.com/sections/features-a ... newest-etf
Already has over $1 billion in assets and is the ninth largest fund in the ultra short term category. The leaders are JPST, SHV, BIL, ICSH, GSY, GBIL, BSCL, and IBDM. BSCL and IBDM are just the short dated defined maturity bond funds that are gradually headed towards their expiration.
Likely it is money that can't easily be moved to HYSAs.UpperNwGuy wrote: ↑Sat Jul 10, 2021 9:13 pmI'm frankly astonished that so many people are seeking actively-managed, ultra-short-term bond ETFs when interest rates are so low.calwatch wrote: ↑Fri Jul 09, 2021 8:37 pm ETF.com has a three month retrospective: https://www.etf.com/sections/features-a ... newest-etf
Already has over $1 billion in assets and is the ninth largest fund in the ultra short term category. The leaders are JPST, SHV, BIL, ICSH, GSY, GBIL, BSCL, and IBDM. BSCL and IBDM are just the short dated defined maturity bond funds that are gradually headed towards their expiration.