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http://boards.fool.com/i-was-shocked-when-i-discovered-the-turn-over-rate-28195400.aspx
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| Subject: Re: Bonds vs Bond Funds--Again | Date: 12/30/2009 10:16 PM | |
| Author: temsike | Number: 29616 of 35109 | |
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I was shocked when I discovered the turn over rate (TOR) for my VANGUARD indexed bond fund called BND. It has a TOR of 61% of port per year. VT, VTI, and VEU which are Vanguard's broadest-based indexed stock ETFs. Their TORs are 5%, 5%, and 6% respectively. The difference is that stocks don't mature. They go on. Bonds mature and need to be replaced and must be traded. So...if my supposedly CHEAP and INDEXED bond ETF has a 61% TOR, what does a bond hyper-trader like Junkie's TOR look like? Personally, I'm afraid to even look at them. It's hard to argue with SIMPLE arithmetic. The more you trade, the more you lose. |
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