Bob Brinker Free Discussion Site 59,820+

Top 75. Mar 3, 2005 3:13 PM

» arommel88 - Re: Re: Re: Re: Brink's current bond recommendation......

In response to Re: Re: Re: Brink's current bond recommendation...... posted by honeyoneohone:

That is a little apples and oranges. VWEHX is rather conservative for a high yield bond fund that averages BB and essentially has no below B rated. Look at the holdings and maturities. STHYX has done worse while NHFIX has turned out better but then it had longer maturities and took more risk than VWEHX. STHYX has short maturities so it did not take advantage of the interest rate driven bull market and thus shows lower numbers.

left column is the fund , right column is industry average.

NHFIX

US GOVERNMENT 0.00 0.67
AAA 0.00 1.19
AA 0.00 0.08
A 0.00 0.67
BBB 0.50 3.19
BB 22.30 24.76
B 55.50 52.47
BELOW B 21.70 13.40
OTHER 0.00 3.56
BOND HOLDINGS
Averages NHFIX Category Avg
Maturity 7.30 6.75
Duration 5.15 4.15
Credit Quality B B
WILINK Presents:
View List of Free Prospectuses

STHYX
US GOVERNMENT 4.20 0.67
AAA 0.00 1.19
AA 0.00 0.08
A 0.00 0.67
BBB 0.00 3.19
BB 21.90 24.76
B 54.70 52.47
BELOW B 19.20 13.40
OTHER 0.00 3.56
BOND HOLDINGS
Averages STHYX Category Avg
Maturity 4.40 6.75
Duration 3.90 4.15
Credit Quality B B
WILINK Presents:
View List of Free Prospectuses

VWEHX
US GOVERNMENT 5.67 0.67
AAA 0.00 1.19
AA 0.00 0.08
A 0.00 0.67
BBB 1.26 3.19
BB 41.80 24.76
B 49.82 52.47
BELOW B 0.32 13.40
OTHER 1.13 3.56
BOND HOLDINGS
Averages VWEHX Category Avg
Maturity 6.50 6.75
Duration 3.91 4.15
Credit Quality BB B
WILINK Presents:
Free Prospectus for VWEHX

-- posted by arommel88

Top 76. Mar 3, 2005 3:33 PM

» honeyoneohone - Re: Brink's current bond recommendation......

In response to Re: Re: Re: Re: Brink's current bond recommendation...... posted by arommel88:

.
When it's all said and done, it's the bottom line that counts--for me, anyway.

But it is good to be aware of risk. That is the point of owning funds rather than individual bonds--spreading risk.

Over the years that I have owned High Yield Bond Funds, I've noticed that even when the big corrections happen, Vanguard holds up very little better than Northern.

-- posted by honeyoneohone

Top 77. Mar 3, 2005 3:53 PM

» honeyoneohone - BTW: Aromme188

In response to Re: Re: Re: Re: Brink's current bond recommendation...... posted by arommel88:

.
I meant to ask you to give us some examples of what you would compare VWEHX with since you are so quick to shoot down my comparison to other High Yield Funds.

-- posted by honeyoneohone

http://finance.yahoo.com/q/bc?s=VWEHX&t=...

Top 78. Mar 3, 2005 8:52 PM

» arommel88 - Re: BTW: Aromme188

In response to BTW: Aromme188 posted by honeyoneohone:

I would have to do a little research on that. I do not think I was quick to shoot you down. I did offer an explaination. BB rated bonds are a higher grade than B bonds and you have to account for maturity. As a matter of fact there is another point to it. STHYX has out performed in the short term because it is not taking as much of a rate hit. Risk ranking an investment is part of the picture.

The difference in default rates is rather large between B and BB. In 2000 returns for BB was +2 and B was -7%. You don't want B or lower during a recession.

That is why VWEHX has a better 5 year and on a risk adjusted bases beat NHFIX. It probably won't on a long bull market.

STHYX is doing better now because of the rising rates. It has shorter maturation.

http://finance.yahoo.com/q/bc?s=VWEHX&t=...

http://www.mutualfundguide.com/editorial...

"In fact, the average cumulative default rate on BB bonds over any two year period from 1994–2003 was roughly 5%, versus 17% for B bonds, which are just a notch lower in investment quality."

I think you were a little quick to shoot me down.

-- posted by arommel88