Have you suffered losses investing in Vanguard Extended Duration Treasury Index? If so, The White Law Group may be able to help.
Since the election, much of the financial commentary has centered on the stock market’s surprising surge. But the largest changes by far have been in expectations for interest rates, which, in turn, have affected the bond markets.
The 10-year U.S. Treasury yield jumped 53 basis points, ending the month at 2.37%. It gained another 8 points on Dec. 1, sending bond prices diving.
In addition, a huge supply of new muni bonds were issued in October, as state and local governments rushed to fund projects ahead of what they expected to be a volatile market after the election.
Funds that invest in long-term bonds with the shakiest credit have been hit hardest. One example, long-term California municipal bonds, are down 6.6%, including reinvested interest, since the July low in interest rates. High-yield munis are down 6.1% the same period.
Vanguard Extended Duration Treasury Index (VEDTX), a $1.1 billion fund, has dropped $21.2% since July 8. While the fund invests in high-quality Treasury securities and charges just 0.06% in expenses, its average duration is 24.73 years.
According to the Vanguard Group website, Vanguard Extended Duration Treasury Index Fund seeks to track the performance of an index of extended-duration zero-coupon U.S. Treasury securities.
“The fund is primarily intended for institutional investors with extremely long-term liabilities—20 years or more. Prospective individual investors are urged to consult with their own advisors to determine if the fund is suitable for their overall investment programs and financial positions.”