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Author: Jmsb526 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35387  
Subject: Why do Treasury Funds lose value? Date: 11/27/2011 7:35 AM
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I was looking at information on Vanguard's website about the Vanguard Short-Term Treasury Fund (VFISX), particulary the historical growth of a $10,000 investment over the past 10 years. According to the chart, the value of the investment would have droppd about $200 at one point during the seventh year.

My question is: If this fund "invests in debt issued directly by the government in the form of Treasury bills," why would an investment in it ever lose value at any point? If an intial investment is made, and if interest is paid at certain intervals, even if rates change, why would there ever be a subtraction in the value of the investment that has already been accumulated?


(I think my question is just a bit different than the one that An321 posted just before me.)
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