Bond funds in general have done poorly this year.
Funds of all lengths could be holding subprime.
Only pure treasuries may be immune.

On Sep 19, 1:45 pm, spasmous <spasm...[at]gmail.com> wrote:
- quote -

The rates on intermediate treasuries already dropped end of August/
beginning of September. You might say the Fed Rate cut just caught up
to the real rate cut caused by market forces.

spasmous <spasmous[at]gmail.com> writes:

- quote -

The bulk of that fund matures in 2013-2016 and the bulk of
the sensitivity then is to the treasury curve around the
6 to 9 year point. The curve didn't *all* move the same
way yesterday. Short rates went down and, actually, the
rate on the 30yr went *up*. Around the 10 year mark,
rates stayed about the same (no more than about a 1 bp move
on the day).

The "duration" of that fund is on the order of 6 yrs,
so if rates *uniformly* moved by, say, 10bps down,
you could expect the value of your fund to go up by
approx 0.6% (which is still only about 6 cents per share
on that fund), but that's only a rough approximation,
and there's a reason it's called a yield curve, not
a singular point yield - it doesn't all move the
same way at the same time.


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spasmous <spasmous[at]gmail.com> writes:

- quote -


- quote -

The Fed cut the rate on overnight loans. You're invested
in an intermediate-term bond fund. The former has no necessary
effect on the latter, especially since once you get to the prices
of bonds with more than a few months to maturity, the market sets
the price (yield), not the Fed.

--
Rich Carreiro rlc-news[at]rlcarr.com

I own Fidelity intermediate term treasuries (http://finance.yahoo.com/
q?d=t&s=FIBIX) and kind of expected to get a bump yesterday with the
drop in interest rates. Just wondering why it only shifted a penny -
the "rules" clearly state that when interest rates go down, bonds go
up. It's not fair