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|Subject: Re: Bonds vs Bond Funds--Again||Date: 12/30/2009 10:16 PM|
|Author: temsike||Number: 29616 of 35439|
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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