Gyroscopic Investing

Sorry for the noob question....

I've read that some here have the 25% bond allocation split 50/50 between EDV and VGLT. 

I'm new to both of these ETFs, so I've only got a few shares each until I can figure out if I want to go all in (25% of total) with these ETFs in my 401k. When I checked my 401k balance today, I was surprised to see that EDV is -$1.25 and VGLT is +$0.55.

I realize that taking a one-day performance snapshot is ridiculous, but I somehow thought I'd see similar performance from day to day. I thought I'd at least see that both were either up or down. Am I wrong in thinking that both of these ETFs are similar in holdings/performance?  And if there is some difference between the two, why hold both?

Thanks.

They are quite different. EDV holds very long-duration zero-coupon bonds, which are extremely volatile. The average duration of its bond holdings is 25 years. It also harvests this volatility to provide synthetic dividends to fund holders. VGLT, by contrast, has much shorter-duration regular coupon T-bonds. The average duration of its holdings is 16.2 years.

Thanks for your reply. Would you still recommend a 50/50 split between these two for the bond holding in the PP?

Also, sorry to get off topic, but what about VUSUX? That fund is also available to me at no commission fee.

Pointedstick wrote: They are quite different. EDV holds very long-duration zero-coupon bonds, which are extremely volatile. The average duration of its bond holdings is 25 years. It also harvests this volatility to provide synthetic dividends to fund holders. VGLT, by contrast, has much shorter-duration regular coupon T-bonds. The average duration of its holdings is 16.2 years.

I use EDV/VGLT 50/50 split.  EDV/VGLT 50/50 split works similar to TLT

Thanks very much for your reply. Based on the feedback in this forum, I'll use the 50/50 EDV/VGLT split towards my 25% bond allocation.

steve wrote: I use EDV/VGLT 50/50 split.  EDV/VGLT 50/50 split works similar to TLT