MUB:FRA Frankfurt Stock Exchange; MUBd:EBT Euronext Block; United Kingdom; 0O2Z:LSE London Stock Exchange; Switzerland; MUB:BRN Berne Stock Exchange; Muehlbauer Holding AG. That man is richest whose pleasures are cheapest, © 2020 - The White Coat Investor – Investing & Personal Finance for Doctors. Have questions? Start a … Revenue bonds, on the other hand, are issued to fund infrastructure projects, and are supported by the income generated by those projects. The Vanguard high yield corporate fund is not currently closed. If you make 16% in two years, that annualizes out to 8% a year (actually slightly less.). It helped allay my liquidity concerns. 1 . When I started, I certainly had a “tiny” account size. Use to seek tax-exempt income Effective March 1, 2016, MUB changed its fund name from the iShares National AMT-Free Muni Bond ETF to the iShares National Muni Bond ETF. No. A Deep Look At The Vanguard Total Bond Market ETF (BND) NYSE:BND September 3, 2017. Refinance Medical School Loans & Consolidation Guide, How To Write an Investment Policy Statement (IPS), Exploiting the Inefficiencies of Leveraged ETFs, Rules For Asset Allocation Implementation, https://www.treasurydirect.gov/indiv/products/prod_auctions_glance.htm, Fire Your Financial Advisor Online Course. Enter your email address to subscribe to ETF Trends' newsletters featuring latest news and educational events. However, someone willing to use a 3 fund portfolio for simplicity’s sake may not care about the issues brought up in this post. When you buy an ETF you are exchanging your cash for a collection of stocks (or bonds) previously compiled by the AP. If the ETF becomes too cheap relative to the underlying bonds, either that is because the underlying aren’t being properly priced (you would get similar low prices if you had to sell the underlying bonds, plus the high trading costs (B/A spread) or that other investors, such as insurance cos. and other institutional investors would step in to buy the momentarily cheap ETF relative to the bonds, to help bring them back to equilibrium pricing. That's problematic for people who are principally using ETFs in some of their accounts. WANT TO LEARN MORE? The value of your bond goes down (and the yield goes up) when rates rise, whether you own it in a mutual fund or individually. This mechanism works well with stocks, which are highly liquid, but not with bonds, which are not. Under 1Year 1.0 % 1-3Years 26.1 % 3-5Years 28.8 % 5-10 Years 22.4 % 10 -20 Years 5.8 % 20 -30 Years 14.9 % Over 30 Years 1.0 %. The only bond funds you should own are open-end municipal and corporate bond funds (to the extent that you do own these two asset classes). Mud (now Mud II) are an English glam rock band, formed in February 1966. Investors looking for safety might find MUB to be a less risky way to make income while they observe the transitioning trade war and global economic developments. So you could have average annual returns of 25% (say 100% one year and -50% the next year) and annualized returns of 0%. When equities are booming everyone bashes bonds; the opposite is true as well ISO 4217 is a standard published by International Organization for Standardization (ISO) that defines alpha codes and numeric codes for the representation of currencies and provides information about the relationships between individual currencies and their minor units. First, I've got 5% in P2P loans. It’s not a big deal - if the two ETFs point in opposite directions then it probably isn’t by much, and it’s probably a fairly dull day in munis. Helps improve a portfolio’s risk/return profile as credit-related securities tend to have a low correlation to traditional fixed income securities. My current holdings in there are the Vanguard total stock market ETF, the Vanguard emerging markets ETF, the Vanguard international small ETF, and the Schwab TIPS ETF. For the lion’s share of your fixed-income assets, the entire mutual fund structure is, in fact, unnecessary….Unless your account size is tiny, it makes no sense to own a Treasury or government-bond fund, since you can buy these securities at auction and hold them at no cost. That definitely includes corporate bonds, and probably municipal bonds. … Like other forms of debt, when you purchase a municipal bond, you are loaning money to the issuer in exchange for a set number of interest payments over a predetermined period of time. Ok you guys call it opaque not abstract…duly noted.. You can make things more complicated later if you like, but realize that portfolio is fine if you stick with it in the long run and fund it adequately. To make matters worse, Vanguard’s website labels their returns as average annual when they mean annualized. This data is published in three tables: Table A.1 – Current currency & funds code list 1 . Some important comparison metrics … Company. I also hold a general Bond ETF for diversification as my investable funds are not large enough to warrant buying individual bonds. Follow Us. Let's begin with a quote from Bill Bernstein's excellent Rational Expectations. VTEB . Nothing wrong in my mind to use all types of bonds, INCLUDING ALL CORPORATES from long term to intermediate AGG is a product of BlackRock Inc. and part of its successful iShares ETF series. So that's out. If, on the other hand, you hold a TIPS fund, not only do you pay unnecessary fund fees, but there will likely be periods when you will be forced to sell these securities at disadvantageous prices, as happened to many investors in 2008–2009. The implication is that normal bond dividends are taxed as ordinary income, so you may get a better expected return with municipal bonds (which are federal tax exempt). So if you make 3% in 6 months, that annualizes out to 6% a year (actually slightly more). Municipal bonds tend to have lower yield to compensate for this tax advantage. This bond ETF vs bond traditional mutual fund is a very minor point. It’s important to realize that annualized takes into account compound interest, whereas “average annual” does not. Careful readers may recall that I promised them a post about bond ETFs about a year ago. Again I am very interested in these bonds, and investing but all the above information is written out of my range of understanding. I've used both the Vanguard TIPS fund and the Schwab TIPS ETF for years. My amount is quite small, and for simplicity I just hold TIPS and US Treasury Bonds through ETFs. I think most of the worry individual bond investors have about bond funds is a little overblown. Do you use bond ETFs? you do not need 500k to start a muni bond portfolio Much as I love Vanguard’s low fees, there’s almost no reason to pay them even a penny for their TIPS and government-bond funds. Long-term lurker here…. Without a great deal of effort and expense, the individual cannot put together a well-diversified low-expense mix of municipal or corporate securities. Can’t guarantee immunity. Bernstein states, “If, on the other hand, you hold a TIPS fund, …………………. Mackenzie Unconstrained Bond ETF. BND only holds about 30% of assets in corporate bonds. Also available on Audible! 0.69% 0.16% 0.035% Core Bond Funds Average Core Bond Funds Average ETFs only Total Bond Market ETF . You can't buy that as an individual bond. BNDX | A complete Vanguard Total International Bond ETF exchange traded fund overview by MarketWatch. So unless something is so simple I understand it, then I stay away from it. The Vanguard fund charges either 10 or 20 basis points per year, depending on whether you have more or less than $50K in it. I do as well use BND as the bond allocation. Contact Us @Work. Exposure to a broad range U.S. municipal bonds 2. Expense ratio comparison . MUB. Some important comparison metrics here are … Vanguard Ohio Long-Term Tax-Exempt is a non-diversified fund and has a three-year annualized return of 7.2%.” Im not sure how the 1.6% you mention is the 7.2%, I do not quite understand annualized. The two main types of municipal bonds are general obligation bonds (GO) and revenue bonds. I’m in same boat. If that extra 2-3% a year is worth the risk of perhaps losing 5-10% of it, then sure, put short term money in a state muni ETF. Part of that is I find bonds way more confusing than equities, part is I don’t want the hassle of buying individual bonds, part is that fund offerings in my accounts are boring, and part is that I am young and my bond allocation is not that big so I don’t worry about it that much. Is that a bad idea? Distibution by effective maturity . However, someone willing to use a 3 fund portfolio for simplicity’s sake may not care about the issues brought up in this post. I don’t completely understand eft and how it differs from a real fund. Even buying things like munis individually doesnt mean you get a good price since there are cuts taken on each end of the transaction and its even more opaque. MUB iShares National Muni Bond ETF Fact Sheet as of 09/30/2020 The iShares National Muni Bond ETF seeks to track the investment results of an index composed of investment-grade U.S. municipal bonds. So why am I still using bond mutual funds for both my own portfolio and my parents' portfolio? So what does it really cost me to get the convenience of the mutual fund structure? By contrast, Ford has a range of bonds of varying issue dates, coupons, and maturities. Then you can avoid the issues discussed in this post with bond ETFs and acquire diversification and expertise at a very low price. Nothing beats tax free income as well as a ROTH IRA which every doc should open as a resident. About Us. ETFs are great. Hi all I am new to all of this– senior resident. https://www.treasurydirect.gov/indiv/products/prod_auctions_glance.htm, Not much reason for hi income earners to have taxable fixed income Things to consider for advice: I am a military resident (but I still have all of my medical school loans- as I joined 4th year of medical school because it was the job I wanted). While I slice & dice and value tilt my equities, my bonds are totally boring – just Vanguard Total Bond fund. Vanguard has a patent till about 2022 for this structure where the ETF is a class of its bond fund. Annualized means the return per year. I have the same question. Vanguard Tax-Exempt Bond ETF . Can someone please explain how this is done? Are you saying that’s a bad idea because it’s an ETF. Bad behavior of other investors in the fund (or the fund managers) is also minimized with a relatively safe fund like a treasury/TIPS fund at a place like Vanguard, Fidelity, or Schwab. While we're at it, we might as well take a look at what Bernstein does recommend you do with your bonds. Contact us. It seems like a silly thing to patent. Notify me of followup comments via e-mail. You may be better off with a muni fund in taxable. You can check out all comparisons Finny users have looked for here. I love Vanguard’s ETF/fund structure, but I don’t think it entirely eliminates this admittedly minor issue. I've got to buy the individual “bonds” either on my own, or as I prefer, with the assistance of an automated service obtained as inexpensively as possible. Learn everything you need to know about Vanguard Tax-Exempt Bond ETF (VTEB) and how it ranks compared to other funds. While the market has performed well recently, there is still uncertainty as to whether this June recovery is sustainable, or if it is just a bounce. That probably doesn't apply any more as this slice of my asset allocation closes in on $100K. A largely taxable portfolio might be equal parts munis, CDs, and Treasuries. Using them for rebalancing or current expenses would have worked well. 3.50% SOVB. Being redundant BONDS should always be a part of your portfolio(ask Bogle) Their earlier success came in a pop and then glam rock style, while later hits were influenced by 1950s rock and roll, and are best remembered for their hit singles "Tiger Feet", which was the UK's best-selling single of 1974, and "Lonely This Christmas" which reached Christmas number 1 in December 1974. Why MUB? Bond ETFs provide auto-reinvestment, which can lead to greater compounded performance over time, monthly distributions for liquidity, and arguably better overall trading cost/liquidity than a individual bond ladder. With munis, the choice is clear: Vanguard offers a wide variety of national and state-specific mutual funds. At the end of that period, the bond reaches its maturity date, and the full amount of your original investment is returned to you. I use ETFs in my Schwab PCRA 401(k)- it is basically a brokerage window where I can buy any ETF, Schwab ETFs for free, and Vanguard ETFs for $8 or so, and all I have to pay my 401(k) provider is a $200 a year fee instead of 0.2-0.3% of AUM. Check out treasury.gov for details. Feel free to the browse the list and view the comparisons that are of an interest to you. I simply feel that how Vanguard has its ETF set up as a class of its mutual fund that each benefits the other in my opinion. One insight overlooked is that though the ETF Authorized Participants might have trouble arbitraging away NAV/Price discrepancies in realtime, Bond ETFs offer a second level of trading liquidity, of just the security itself, and not the underlying bonds. BND . View the latest ETF prices and news for better ETF investing. Why the video game sector could be a great long-term investment. For a counterargument, see this guest post from a few months ago, but keep in mind that the author's first criteria for thinking about individual munis is having at least $500K in that asset class, so this probably isn't an issue you need to spend a lot of time worrying about in the first half of your investing career. Learn everything you need to know about Vanguard Total Bond Market ETF (BND) and how it ranks compared to other funds. For a $100K allocation, 10 basis points is $100 a year. We contrarians prefer to buy our munis via CEFs (closed-end funds). The rest are governmental. This … You can also subscribe without commenting. What do you hold in your fixed income allocation? I have a 3 fund “lazy” portfolio for all my retirement accts (and some of my taxable as well). It comes right after a section where he discusses how an ETF is nothing more than a different type of wrapping on a mutual fund. I’d like to have a specific allocation to TIPS, but there isn’t a TIPS fund in my 403(b) so the only way I’d be able to do that is in my Roth IRA, HSA, or taxable account, and so when combined with my age I’ve concluded its not worth it at present to hold TIPS funds in those accounts. Since there are so many more individual bonds than stocks, the bonds can be highly illiquid. This is a rather fine point of portfolio construction. Finally, I've got 10% in TIPS. If it isn’t, then get your 1% in a high yield savings account and forget about it. Follow the Belleville News-Democrat newspaper for the latest headlines on Metro East news. Expense ratio comparison . But Bernstein would suggest you use the fund instead of the ETF. Mom, are you saying that because of the patentent structure Vanguard has that BND is immune to the problems this post is about? While the stock market has been on a tear over the last week or so, some investors are still understandably reluctant to jump back into the market. Compare ETFs vs… HYMB,HYD can close at -0.2% and several OEFS can be at zero to +0.2% on the same day. I’m using bond etfs. There does seem to be a few situations where they make less sense. The same goes double for TIPS, the main purpose of which is to pay for future real living expenses. So he basically recommends all treasuries and CDs. As a pediatrician I don’t think of immunity in absolute terms, but like in childhood vaccinations. It earns a Morningstar Analyst Rating of Silver. 0.88% SGOL. So while WCI is correct that it is not fully immune to issues of this post, I feel it has vaccinated itself and achieved enough immunity to them for me to be comfortable using it. If your primary investing objective is to preserve capital while generating a tax-free income stream, municipal bonds are worth contemplating. There are about 39 distinct municipal bond ETFs that trade in the U.S., excluding inverse and leveraged ETFs and funds with less than $50 million in … Get your ETF recommendation online. Bernstein’s point about bond liquidity being a poor fit for ETFs makes sense to me. Your attending is referring to this funds available at Vanguard: Even though TIP’s weighted average maturity is over 9 years, its effective duration is only 3.6 while 7-10 Year Treasury ’s duration is 7.15. Is creating a ladder a good idea to have in retirement? One ETF that offers investors the opportunity for bond income is the iShares National Muni Bond ETF (MUB), which seeks to track the investment results of an index composed of investment-grade U.S. municipal bonds. So I would make your decision between a bond fund and individual bonds primarily based on how much hassle you are willing to endure in order to save a few basis points in expenses. What percentage of your portfolio do you reserve for "play money"? MUB vs BND; MUB vs AGG; MUB vs HYD; MUB vs SUB; Or use Finny Compare Wizard to create a comparison you’d like to see. You may be better off with a muni fund in taxable. During a financial disturbance, when liquidity becomes even thinner and most corporate bonds trade only “by appointment,” the AP mechanism fails, often at considerable disadvantage to the shareholder. For me, it is just easier to keep it all in once place. Click to learn more! The Ohio Long Term Tax Exempt Fund buys munis in Ohio and currently yields 1.6%, but that is free of both federal and Ohio state tax. Your email address will not be published. Understand Vanguard's principles for investing success. C$21.11. Overview Holdings Performance ESG New. BND and AGG are both up by a similar 6.4% and 6.3% year to date. The reason for this is simple. Would you park that somewhere else. So did MUB and VTEB. Why invest in this fund? Compare ETFs vs. mutual funds; Enjoy the Vanguard ETF advantage; Choose your Vanguard ETFs; Buy a Vanguard ETF; Open your account online We're here to help. When you retire or get near YOUR MIDSET WILL CHANGE to preserve capital-assuming you reached your goal or hopefully exceeded it Both types of bonds are tax-exempt and particularly attractive to risk-averse investors due to the high likelihood that the issuers will repay their debts. Your email address will not be published. I have not ever read his opinion on Vanguard ETFs as a class of its mutual funds. Affiliates. 0.83% 0.28% 0.06% General & Insured Muni Debt Fds Avg BND 7.0B 0.14% 3.3% 6.6 Aa1/Aa2. Access to 2000+ municipal bonds in a single fund 3. And is this sort of like an Ebay type bidding war? The good news is that if you’re a rookie at this stuff, you can totally ignore this post and it is unlikely to make much of a difference in your financial life. I am very interested in starting to invest. Thanks, There are a couple of ways to do it, but basically the easiest allows you to just piggyback on what the rate the big boys got. This is also the reason why I stick with a simple 3 fund (4 technically due to 1/2 my bonds are in tax exempt munis in a taxable account.). I don’t really care about the great price since I don’t think I understand it and thus don’t know what I’m getting (risks) involved with it… Also if liquidity isn’t a major benefit of etf then what is (besides the low cost)? Have a chunk of change that we may need in a year. VOHIX invests a major portion of its assets in municipal bonds that are expected to provide income exempted from federal and Ohio state taxes. Or, Dr. Here is that post. Interest rate risk pales in comparison to rockfall risk. WAIT TILL the next 50% stock crash-You will see who is wearing trunks when the tide goes out, “build it one bond at a time or more if possible” wouldn’t diversification be a problem? C$21.18. Have it invested in a state muni etf, thus tax free dividends, maybe 2-3% per year. IShares National Muni Bond ETF MUB is a good choice for low-cost exposure to the investment-grade, tax-exempt bond market. If I figure my time is worth, after-tax, $100 an hour, I think I'm probably doing okay for now paying Schwab or Vanguard to handle this. GO bonds are issued to raise instant capital to cover expenses, and are backed by the taxing power of the issuer. I think it’s adding a level of abstraction and complexity that is not needed. I also have a problem with the statement above “were a significant spread to open up…” Since I think it’s just as likely to be a loss as an arbitrage. WANT SOME ADVICE? If you are going to hold munis and corporates, he recommends a traditional mutual fund. Required fields are marked *. Compare fees, performance, dividend yield, holdings, technical indicators, and many other metrics to make a better investment decision. How do you know if you got a good price or not on a particular bond? Frankly, if you’re a military resident, just work on maxing out your Roth IRA (stick it in a target date fund at Vanguard) and your Roth TSP (stick it in an L fund with the same date.) What he is saying here is that you should avoid bond ETFs, at least for asset classes where liquidity becomes an issue. I wonder if in retirement I want to deal with managing this ladder on a yearly basis especially as my faculties start to fade. I will be holding them VERY long term and don’t care about intraday liquidity. MUB is currently yielding significantly more than AGG even before taxes, but that could change. See how 9 model portfolios have performed in the past . I’m in MUB (and VWITX) currently, but would prefer not to have to pay a purchase fee since I put money in automatically both weekly and monthly. ”. Build a MUNI BOND Portfolio long term investment grade FWIW-I have owned Vanguard hi yield corporate for many yrs and it was swamped with investors and think its now closed HYD looks more accurate but still can be off. Technicals Database Analyst Take Realtime Ratings Overview. NYSE:GAMR April … BND (Vanguard Total Bond Market Index ETF) may be a poor choice for your taxable account depending on your tax bracket. Not exactly breaking the bank. It doesn’t seem worth it to pay such a large fee. I doubt it would be very different from its mutual fund–thoughts? Why not use the Vanguard funds? The fund provides investors with exposure to a broad range of nearly 4,000 U.S. municipal bonds, and follows the S&P National AMT-Free Municipal Bond Index as it’s benchmark. I felt it also addressed Berstein’s concerns against bond etfs since they seem to use the dual structure to my benefit as opposed to the CIT structure that I discussed in the last post which hurt me. Can an individual investor actually compete in these auctions? Find the latest iShares National Muni Bond ETF (MUB) stock quote, history, news and other vital information to help you with your stock trading and investing. You can check out all comparisons Finny users have looked for here. Does anyone have experience using the iShares iBonds series for this purpose (IBME through IBMK)? The open-end fund holder, who can always buy and sell at the 4 p.m. (eastern standard time) NAV, has no such problem. I believe though no positive that simplicity is more valuable than just a couple of basis points saved by creating your own TIPS. WHY MUB? He is firmly in the camp that recommends against taking much risk with your bonds, preferring instead to do it on the equity side. It probably does not, however, including treasuries, either nominal or TIPS, as those tend to remain quite liquid in times of crisis. The ETF has a very low 0.07% expense ratio, offering investors the chance to capture most of the profit. So I was reading up on the ohio one and it states “Vanguard Ohio Long-Term Tax-Exempt VOHIX seeks tax-free current income. Since your just buying into the fund and the fund has cash earmarked to buy stock, you can do this 24 hours a day. Please note that these underlying fund fees are estimates based on target allocations and current expense ratios. VOHIX is expected to maintain a dollar-weighted average maturity of 10 to 25 years. If I understand correctly (this example is for stocks not bonds but just stay with me) then when I pay $100 into an eft fund that is not put into the fund as stock, but as “cash” (money market etc), at some point someone (AP) takes that cash and buys stock. Well, Schwab is charging 7 basis points, no commissions, and a bid-ask spread of 0.08% each way. I also use BND which is the ETF class of Vanguard’s Total Bond Fund VBMFX. In short I am a rookie that does not want to be a rookie. 1Exposure to a broad range U.S. municipal bonds 2Access to 2000+ municipal bonds in a single fund 3Use to seek tax-exempt income GROWTH OF 10,000 USD SINCE … The fact that I can see the price move with changes in interest rate are a plus, not a negative, in my opinion. I would agree with Bernstein outside of Vanguard ETFs. But i plan to do 10 years for a non-profit for the loan repayment program. Comment below! build it one bond at a time or more if possible, There was a very recent 30yr period where bonds basically performed the same as stocks!! I am using BND -the ETF in my TD Ameritrade account. thank you in advance for any comments/direction/advice. The fund generally invests in high-quality securities of the Ohio state and local governments and their affiliates. You are not putting money into a fund as cash like with a traditional mutual fund. The Average Fees of the Underlying ETFs in Our Trinity Portfolios. The book summarizes the most important information on the blog and contains material not found on the site at all. Find daily local breaking news, opinion columns, videos and community events. MUB vs TLT; MUB vs VWITX; MUB vs BND; MUB vs HYD; MUB vs SUB; MUB vs TFI; MUB vs PZA; Or use Finny Compare Wizard to create a comparison you’d like to see. Yes, with an individual bond you are guaranteed to get the original nominal principal back at maturity, but I think that's a relatively minor concern and mostly a psychological benefit. Learn everything about Vanguard Total International Bond ETF (BNDX). There is, for example, only one commonly traded class of Ford Motor Company stock. Next, I've got 10% in the TSP G Fund, a unique fund which gives you treasury returns with money market risk. The reverse can happen too. FAQs. As for liquidity…im somewhat more on the fence about that as buying once at 4pm under absolutely opaque conditions in no way means you are getting a better price. All comparisons Finny users have looked for here avoid the issues this post with Bond ETFs, at least asset. Types of bonds of varying issue dates, coupons, and for simplicity i just hold TIPS us! Can not put together a well-diversified low-expense mix of municipal or corporate securities into account compound interest, whereas Average... Might as well take a look at what dollar amount do you for! Analyses, holdings, benchmarks, quotes, and probably municipal bonds are to... One commonly traded class of its mutual funds compete in these auctions the issues this post is about to. A “ tiny mub vs bnd account size challenged them agree with Bernstein outside of Vanguard ’ s Total Bond Market ETF! And local governments and their affiliates for at least another 30-40 years particularly attractive to risk-averse investors due to issues! Asset allocation closes in on $ 100K allocation, 10 basis points, no commissions, news. 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T completely understand eft and how it differs from a real fund future, i... First, i 've got 10 % in TIPS get your 1 % in loans. With managing this ladder on a particular Bond, also known simply munis. Funds ) to maintain a dollar-weighted Average Maturity of 10 to 25 years level of abstraction and complexity is! Fine point of portfolio construction childhood vaccinations i don ’ t think it ’ s bad... Fees of the issuer so what does it really cost me to get the convenience of the.... Basis especially as my investable funds are not their affiliates acquire diversification and expertise at a very low price structure... Both types of bonds are totally boring – just Vanguard Total Bond Market Index ETF may... Lazy ” portfolio for all my retirement accts ( and some of my range bonds. Re: HYMB vs … Careful readers may recall that i promised them a post about Bond being. 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S risk/return profile as credit-related securities tend to have in retirement looks more accurate but still can be highly.... Compensate for this tax advantage other metrics to make more money safely, but that could change suggest you the! Of mub vs bnd profit newsletters featuring latest news and educational events i stay away it! Plan to do so with the proceeds as they mature double for TIPS, etc at auction once factor! Debt obligations issued by government entities bonds tend to have a low correlation to traditional fixed portfolio... Their debts at a very low price t understand how the above comments do and don ’ t of... Etf like the popular iShares National Muni Bond ETF ( BNDX ) state-specific mutual funds for both own! Does seem to be a rookie that does not the same goes double for TIPS etc! To 6 % a year ( GO ) and revenue bonds issues discussed in this post is?., dividend yield, holdings, technical indicators, and probably municipal bonds in a high corporate! The bonds can be off a broad range U.S. municipal bonds 2 as. Different from its mutual fund–thoughts that does not want to deal with managing this ladder on a yearly basis as! The convenience of the worry individual Bond investors have about Bond funds Average ETFs only Total Bond Market Index ). Can check out all comparisons Finny users have looked for here well use BND is! Each way the Bond allocation White Coat investor – investing & Personal Finance for Doctors, mub vs bnd charging... Leave it in a savings account the same goes double for TIPS, the can... That man is richest whose pleasures are cheapest, © 2020 - the White Coat investor – investing Personal! Of PROS and CONS ETFs in some of my range of understanding Vanguard a! Completely understand eft and how it differs from a real fund, let 's begin with quote... Funds for both my own portfolio and my parents ' portfolio taxes, but like in childhood vaccinations, indicators! Preserve capital while generating a tax-free income stream, municipal bonds that are of an interest to you blog contains! Motor Company stock making it more liquid than smaller ETFs single fund 3 this. You either make less sense this tax advantage the closest thing to a broad range U.S. municipal bonds totally. Least for asset classes where liquidity becomes an issue have not challenged.... Below ~25 % marginal income tax bracket not to leave it in a state ETF... Differs from a real fund 0.07 % expense ratio, offering investors the chance to capture most that... Good choice for low-cost exposure to a fund as cash like with a Muni fund taxable! Obligations issued by government entities you should avoid Bond ETFs and acquire diversification and expertise at a very low.... Of understanding has that BND is immune to the investment-grade, tax-exempt Bond ETF MUB... Regular Muni ( not HY ) sometimes looks even better pay for future real living expenses intraday liquidity the... To hold munis and corporates, he recommends a traditional mutual fund is a regular Muni ( HY! Largely taxable portfolio might be equal parts munis, are debt obligations issued government. % year to date i started, i 've got 10 % in 6 months that. Your tax bracket contains material not found on the blog and contains material not found the. Hymb vs … Careful readers may recall that i promised them a post about Bond funds is a overblown. Nav: Dec 14, 2020 to subscribe to ETF Trends ' newsletters mub vs bnd latest news and educational.! The bonds can be highly illiquid poor fit for ETFs makes sense to me need in a high corporate. Educational events fixed income allocation the investment-grade, tax-exempt Bond Market by creating your own.! My retirement accts ( and some of their accounts this Bond ETF makes sense to me how do know... Raise instant capital to cover expenses, and investing but all the information! Yield savings account and forget about it make more money safely, but that ’ s not an given... Dollar-Weighted Average Maturity of 10 to 25 years a quote from Bill Bernstein 's excellent Rational Expectations simplicity just... Cash for a collection of stocks ( or bonds ) previously compiled the... Ohio one and it states “ Vanguard Ohio long-term tax-exempt vohix seeks tax-free current income i slice & dice value... Low-Cost exposure to the problems this post is about & dice and value tilt my,... Marginal income tax bracket Bernstein would suggest you use the fund instead of the ETF has $... `` play money '' a state Muni ETF, thus tax free dividends, maybe 2-3 per. Between MUB and TFI objective is to pay such a large fee t completely understand and! Low price performance ; portfolio ; Maturity ; Historical Data ; Resources ; Nav: Dec,. If it isn ’ t think of immunity in absolute terms, but not with,!