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No. of Recommendations: 4
Ok guys, we all placed our bets about what would happen to the Vanguard GNMA fund and now it's 10 years later. It's time for me to say "I told you so." (please click on Whole Thread and read back over this discussion which began in 2009 and has lain dormant since then).

Over the last 10 years a $10,000 investment in Vanguard GNMA fund grew to almost $14k, a CAGR of 3.21%. see chart:

The share price is modestly lower, but that could not be more irrelevant -- capital gains did occur but they went out to shareholders as distributions rather than accumulating in the share price.

Conclusion: If you have money that you do not want at risk but you do want to grow modestly -- faster than inflation -- this fund is a great place for it. There is a little gyration inverse to interest rates, but not much. There is zero default risk.

I think it's very interesting to read back over this discussion, knowing what we know now. Please do click on "whole thread."

Now everyone pile on and say "Okay you were right about the last 10 years, but for the next 10 years GNMAs are a terrible investment." Then we'll visit this again in 2029.
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