Bogle: Overweight Corporates, underweight Treasurys

  • Thread starter David S. Meyers, CFP(R)
  • Start date

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David S. Meyers, CFP(R)

[An interview posted on IndexUniverse]

<http://www.indexuniverse.com/sectio...or-corporates.html?showall=&fullart=1&start=4>

Bogle: And nobody knows the answer. So, I would still stick to the kind of tried-and-true, the bond index. Or, as you know from other writings, I’m not so happy with the bond index. I think it’s too heavily in Treasurys to be a fair representation of U.S. investors.

IU: What have you proposed?

Bogle: I actually proposed to Vanguard they start a corporate bond index fund and they just didn’t like the idea. But it just seems to me that’s a kind of slam dunk. So, I think it’s clear that we’re not going to have one and so I’ve actually done it myself. A couple of years ago when the spreads got huge, I did move some of my bond index into the corporate bond index, it would accomplish the same thing. It can be done. I was very happy in the first few years. This year is not making much difference. But I don’t pay much attention to the year-by-year.

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Of course, Vanguard now does have corporate-only index ETFs: VCSH, VCIT, VCL, as well as other subsets of the bond index such as mortgages: VMBS

These all started trading in Nov 2009, so his complaint may be that these index funds came in the form of ETFs rather than the traditional open-ended funds that Bogle prefers.



--
David S. Meyers, CFP(R)
http://www.MeyersMoney.com
disclaimer: discussions in misc.invest.financial-plan are for
educational purposes only and should not be construed as financial
advice. For personal financial advice, please consult directly with a
professional.
 
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