Gyroscopic Investing

From what I can tell TLT still seems to be the only fund or ETF that consistently keeps the maturities to 20+ years and doesn’t allow up to 20% of assets to be invested in swaps, cash, etc.

VGLT appeals with its much cheaper (.05 vs. .15) ER. Any other good options?

You might also check out SPTL and FNBGX. Both great options with very low ERs. Even though the prospectus says they hold treasuries between 10 and 30 years to maturity, if you look at the actual breakdown something like 90% are 20+. The same goes for VGLT.

Thanks very much Tyler!

Schwab just introduced a LTT ETF. SCHQ. I think its the lowest expense ratio LTT ETF available. A bit shorter duration that TLT. That might offset the expense ratio I guess.

jalanlong wrote: ↑Fri May 15, 2020 8:42 pm Schwab just introduced a LTT ETF. SCHQ. I think its the lowest expense ratio LTT ETF available. A bit shorter duration that TLT. That might offset the expense ratio I guess.

Thanks for the head's-up. I see the fund just opened 10/19. Duration is good, expense ratio at .05 same as Vanguard's VGLT. Fidelity's FNBGX at .03 is the low cost leader. The only issue I see with SCHQ is at $52M in assets it's tiny so could have liquidity issues. TLT is many times the size of all of the other LTT ETF's and so will remain the benchmark.

I've split my own LTT's between VGLT and SPTL, knowing I'll have to keep an eye on them to make sure they don't reduce average maturities and durations beyond my comfort zone in the future. Historical returns on all of these ETFs are very close. I'd have bought FNBGX if I could have but it'd have to have been in my Schwab account and (understandably) they weren't going to let me buy this FIDO ETF.

All of Schwab's Treasury ETFs are solid and offer rock-bottom expenses. I use SCHO for a big part of my STT/cash position.

Most of my LTTs are in directly held 30 year T-bonds at Fidelity in an IRA. I do keep a small amount of TLT as well, for rebalancing.

That said, I am glad to see that there are other ETF choices. Like gold, the increasing choices in LTTs is good for competition, and that is good for the HBPP investor.

It's also quite safe to put bonds in taxable right now, in whatever your preferred form. If bonds go up (i.e. yields drop near zero) and you need to rebalance, you can still do so in tax-protected space if you have holdings there. If bonds go down (i.e. yields go up) you can tax loss harvest and shift to tax-advantaged space.

And in the meantime, they won't throw off much interest. In fact you can argue that stocks are more in need of protection because their yields are actually higher than bonds. And a lot of that yield will be taxed at ordinary income rates if you own a fund, because they'll be classed as ordinary dividends.

This is definitely a time when you have to take the conventional wisdom rulebook and throw it out the window.

long term treasuries have to get treated like you would stocks since the gains and loses they generate can be big .

i split them between taxable and ira ... our interest is not taxed by ny or nyc

sophie wrote: ↑Fri May 22, 2020 10:58 am It's also quite safe to put bonds in taxable right now, in whatever your preferred form. If bonds go up (i.e. yields drop near zero) and you need to rebalance, you can still do so in tax-protected space if you have holdings there. If bonds go down (i.e. yields go up) you can tax loss harvest and shift to tax-advantaged space.

And in the meantime, they won't throw off much interest. In fact you can argue that stocks are more in need of protection because their yields are actually higher than bonds. And a lot of that yield will be taxed at ordinary income rates if you own a fund, because they'll be classed as ordinary dividends.

This is definitely a time when you have to take the conventional wisdom rulebook and throw it out the window.

sophie,
Thanks for reminding me about the potential for tax loss harvesting LTTs in taxable accounts. I have probably been too focused on the deflationary pressures weighing down the US economy and therefore overlooked the plausible case that rates may rise and LTTs may fall as a consequence.

Only about 12% of my investment portfolio is taxable, so I haven't spent much time thinking about TLH.