Vanguard

Type_45

TheAble said:

Ps for what it's worth I personally wouldn't want any exposure to bonds in my portfolio, with interest rates where they are and indebtedness of governments, but that's just my preference. Just last year the German government sold a 30 year bond with a negative yield, which is just nuts.

VLS100 has performed worse recently than the VLS's which have bonds.

TheAble

Type_45 said:

TheAble said:

Ps for what it's worth I personally wouldn't want any exposure to bonds in my portfolio, with interest rates where they are and indebtedness of governments, but that's just my preference. Just last year the German government sold a 30 year bond with a negative yield, which is just nuts.

VLS100 has performed worse recently than the VLS's which have bonds.

Entirely possible. It's the long-term prospects I'd be concerned about.

NottinghamKnight

Type_45 said:

TheAble said:

Ps for what it's worth I personally wouldn't want any exposure to bonds in my portfolio, with interest rates where they are and indebtedness of governments, but that's just my preference. Just last year the German government sold a 30 year bond with a negative yield, which is just nuts.

VLS100 has performed worse recently than the VLS's which have bonds.

May well have, until the bond rubber band snaps.......

Type_45

NottinghamKnight said:

Type_45 said:

TheAble said:

Ps for what it's worth I personally wouldn't want any exposure to bonds in my portfolio, with interest rates where they are and indebtedness of governments, but that's just my preference. Just last year the German government sold a 30 year bond with a negative yield, which is just nuts.

VLS100 has performed worse recently than the VLS's which have bonds.

May well have, until the bond rubber band snaps.......

I don't know enough about it to comment.

Personally, I have VLS80 and VLS100. Overall I have about 85% equities and 15% bonds.

I have toyed with the idea of being 100% equities, but the performance of the VLS bonds over the past year has persuaded me to retain my 15% VLS bonds for now.

NottinghamKnight

Type_45 said:

NottinghamKnight said:

Type_45 said:

TheAble said:

Ps for what it's worth I personally wouldn't want any exposure to bonds in my portfolio, with interest rates where they are and indebtedness of governments, but that's just my preference. Just last year the German government sold a 30 year bond with a negative yield, which is just nuts.

VLS100 has performed worse recently than the VLS's which have bonds.

May well have, until the bond rubber band snaps.......

I don't know enough about it to comment.

Personally, I have VLS80 and VLS100. Overall I have about 85% equities and 15% bonds.

I have toyed with the idea of being 100% equities, but the performance of the VLS bonds over the past year has persuaded me to retain my 15% VLS bonds for now.

Bond interest is typically near zero as it reflects base rate, so any increases that have occurred are as a result of capital appreciation. The capital appreciation is due to current and future interest rate expectations, interest rates continue to fall so people re prepared to pay more for bonds giving a 'relatively' high rate. This process will not continue indefinitely ans when interest rates rise then very large capital losses will occur in bonds and bond funds. 

Thrugelmir

TheAble said:

 Just last year the German government sold a 30 year bond with a negative yield, which is just nuts.

ECB charges banks interest on overnight deposits. Lesser of two evils for corporate and other large investors holding cash balances on deposit. 

Type_45

NottinghamKnight said:

Type_45 said:

NottinghamKnight said:

Type_45 said:

TheAble said:

Ps for what it's worth I personally wouldn't want any exposure to bonds in my portfolio, with interest rates where they are and indebtedness of governments, but that's just my preference. Just last year the German government sold a 30 year bond with a negative yield, which is just nuts.

VLS100 has performed worse recently than the VLS's which have bonds.

May well have, until the bond rubber band snaps.......

I don't know enough about it to comment.

Personally, I have VLS80 and VLS100. Overall I have about 85% equities and 15% bonds.

I have toyed with the idea of being 100% equities, but the performance of the VLS bonds over the past year has persuaded me to retain my 15% VLS bonds for now.

Bond interest is typically near zero as it reflects base rate, so any increases that have occurred are as a result of capital appreciation. The capital appreciation is due to current and future interest rate expectations, interest rates continue to fall so people re prepared to pay more for bonds giving a 'relatively' high rate. This process will not continue indefinitely ans when interest rates rise then very large capital losses will occur in bonds and bond funds. 

Interest rates won't be rising anytime soon, so I don't think what you say is an issue.

TheAble

Thrugelmir said:

TheAble said:

 Just last year the German government sold a 30 year bond with a negative yield, which is just nuts.

ECB charges banks interest on overnight deposits. Lesser of two evils for corporate and other large investors holding cash balances on deposit. 

Perhaps. But when you're lending money for 30 years with the surety that you'll get less back than you started with (never mind inflation) then something clearly is very wrong. 

Albermarle

Type_45 said:

NottinghamKnight said:

Type_45 said:

NottinghamKnight said:

Type_45 said:

TheAble said:

Ps for what it's worth I personally wouldn't want any exposure to bonds in my portfolio, with interest rates where they are and indebtedness of governments, but that's just my preference. Just last year the German government sold a 30 year bond with a negative yield, which is just nuts.

VLS100 has performed worse recently than the VLS's which have bonds.

May well have, until the bond rubber band snaps.......

I don't know enough about it to comment.

Personally, I have VLS80 and VLS100. Overall I have about 85% equities and 15% bonds.

I have toyed with the idea of being 100% equities, but the performance of the VLS bonds over the past year has persuaded me to retain my 15% VLS bonds for now.

Bond interest is typically near zero as it reflects base rate, so any increases that have occurred are as a result of capital appreciation. The capital appreciation is due to current and future interest rate expectations, interest rates continue to fall so people re prepared to pay more for bonds giving a 'relatively' high rate. This process will not continue indefinitely ans when interest rates rise then very large capital losses will occur in bonds and bond funds. 

Interest rates won't be rising anytime soon, so I don't think what you say is an issue.

You are most likely right in saying that interest rates will not rise anytime soon .
However it is also correct to point out that the attraction of holding bonds long term is a lot less than it used to be.

Thrugelmir

TheAble said:

Thrugelmir said:

TheAble said:

 Just last year the German government sold a 30 year bond with a negative yield, which is just nuts.

ECB charges banks interest on overnight deposits. Lesser of two evils for corporate and other large investors holding cash balances on deposit. 

Perhaps. But when you're lending money for 30 years with the surety that you'll get less back than you started with (never mind inflation) then something clearly is very wrong. 

The ECB's policies have so far failed to ignite inflation. While banks in the Eurozone remain behind the curve of recapitalising following the GFC of over a decade ago.