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Author: temsike Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35351  
Subject: Re: Bonds vs Bond Funds--Again Date: 12/30/2009 10:16 PM
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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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