Bond funds for an etf portfolio

Bobziz

Hi, I'm currently holding a fair wedge in mmf's which are providing both a reasonable return and reducing volatility. Going forward as interest rates drop I'll be looking for move into longer duration funds, possibly a mix of short dated and intermediate.

I'm interested in what others hold in the fixed interest part of their portfolio, particularly etf portfolio's. Have you made the move into longer duration, have you continued to hold intermediates ? Do you reduce volatility and risk in other ways, perhaps a gilt ladder ?

As always, any thoughts much appreciated.

Mark_d

My portfolio is currently roughly 75% in income shares and 25% in ETF GLT5.  I tend to avoid funds, especially MMFs because the charges are high and the benefit is questionable.

Albermarle

I though most STMM funds only charged about 0.1% ?

aroominyork

Why not start with VAGS, a global aggregate bond ETF, and ask yourself where it might not meet your needs. eg are you happy with about 60-65% govt, 35-40% corporate/securitised? are you happy with global developed countries or would you prefer UK or some emerging debt? are you happy with hedged? are you happy with modified duration c.6.5 years? are you happy with high grade or do you want a larger chunk of BBB/junk?

GeoffTF

You are a bit late to the party here. Longer dated bonds have already gone up in price. VAGS is likely to be a good choice if it is in a tax shelter.

Bobziz

aroominyork said:

Why not start with VAGS, a global aggregate bond ETF, and ask yourself where it might not meet your needs. eg are you happy with about 60-65% govt, 35-40% corporate/securitised? are you happy with global developed countries or would you prefer UK or some emerging debt? are you happy with hedged? are you happy with modified duration c.6.5 years? are you happy with high grade or do you want a larger chunk of BBB/junk?

Thanks, yes VAGS is on my list, and I may go for a mix of UK gov short, UK gov intermediate and VAGS.

Conscious I'm late to the party but maybe fashionably late and the party will continue, albeit in a slightly less noisy way, for a fair bit longer. Looking for a largely set and forget allocation with a bit of rebalancing on a yearly possible 2 yearly basis.

noclaf

This thread is timely as currently trying to simplify my ISA and feel I've gone overboard on the no. of Bond ETF's and there could be room to streamline.

I sold out of a Corp Bond ETF so am left with the below now and ideally would prefer a single 'one and done' ETF for bonds but not sure it's possible to cover all the key flavours of Bonds? 

AGBP

iShares Core Gl Aggregate Bd UCITS ETF GBP Hgd Dis

GILS

Amundi UK Government Bond UCITS ETF Dist

INXG

iShares Index-Linked Gilts UCITS ETF GBP Dist

masonic

You could drop the middle one. If you want index linked that would need to be via a separate fund, but generally shorter dated would be preferable to avoid the interest rate risk associated with rising inflation. I thought there was an index linked 1-5 year ETF available now. Edit: perhaps that was just ITPS (US TIPS), in which case individual holdings are more attractive than a fund.

GeoffTF

noclaf said:

I sold out of a Corp Bond ETF so am left with the below now and ideally would prefer a single 'one and done' ETF for bonds but not sure it's possible to cover all the key flavours of Bonds?

VAGS covers everything that you need. You can add index linked, emerging markets and junk, but you do not need to complicate matters.

noclaf

masonic said:

You could drop the middle one. If you want index linked that would need to be via a separate fund, but generally shorter dated would be preferable to avoid the interest rate risk associated with rising inflation. I thought there was an index linked 1-5 year ETF available now. Edit: perhaps that was just ITPS (US TIPS), in which case individual holdings are more attractive than a fund.

Thanks Masonic, do you have a view on Corp Bonds and the need to include them? My understanding is they move broadly in lockstep with Equities so wouldn't provide much diversification when Equities drop....possibly an over-simplification but that's why I dropped the Corp Bond ETF.

noclaf

GeoffTF said:

noclaf said:

I sold out of a Corp Bond ETF so am left with the below now and ideally would prefer a single 'one and done' ETF for bonds but not sure it's possible to cover all the key flavours of Bonds?

VAGS covers everything that you need. You can add index linked, emerging markets and junk, but you do not need to complicate matters.

Is VAGS similar to AGBP? The descriptions of each ETF seem similar so thinking maybe don't need to change for now if they broadly cover similar bonds.