>>expect total returns over time (he didn't say how long, as I remember) that equal the interest returns at the time you invest Thanks for the link. I think Mr. TIPS is warning novice investors (who may judge a fund by its NAV chart) to look at the current yield alone when setting expectations for future returns. But you make a more subtile point: Will your total return tend to regress to the yield at investment, since if the yield rises, the NAV will drop and vice versa. That sounds reasonable in the medium term. In the short term, interest rates will affect the NAV, but not the yield. In the long term, the bonds which existed in the fund when you bought it will be flushed out and will not affect your total return. I own bond funds for the long term, and for the yield only, so my only hope is interest rates rise. I don't care if the NAV goes to 1, or 1000. At least I don't think I care, since I'm only 80% sure I understand how bond funds work! Nick
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