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Vanguard High-Yield Corporate Message Board

  • therightstuffer therightstuffer Aug 7, 2009 8:48 AM Flag

    TREASURY EFFECT/POOR MANAGEMENT

    Treasuries will be down today because of the "good" employment numbers. VWEHX will no doubt be up. But will it rise commensurately with other junk? I don't think so. The "Treasury Effect" will still hold this fund back. The poor management of VWEHX in the face of an exploding junk market will also mean lower gains today than could have been achieved.

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    • There is certainly some truth in your comments. However if you compare the current yield of say FAGIX(8.29%) with the yield of VWEHX (8.40%) the advantage of the capital appreciation that FAGIX has over VWEHX seems less important. If you are buying and selling then clearly FAGIX and several other "junk bond" funds have the edge. How this will all play out our over a medium to long term time frame is not all that clear. When the junk bond run ends VWEHX may start to look a lot better and in the meantime the difference is not as great as you suggest. I am somewhat locked into my Vanguard account having rolled over money from a now defunct 403B and transferring again would be a pain in the butt so I'm staying put, but I'm pretty happy with the performance of this fund over the past 8 months or so that I've been in it.However I am not offended nor angry at your contrarian view. Quite the contrary we don't need more yes men (or women). Good luck longs.

      Ken

      • 3 Replies to kenpalley2000
      • Ken,

        I agree with your suggestion that VWEHX may have better downside performance than competing funds when the junk bond run ends, which it will. Some people who post on this site seem to only focus on how well their other funds are doing on the way up, forgetting that what goes up eventually comes back down again. If they want to time the market and have a crystal ball to know when to sell near the top, more power to them. However, how many of us can really do that. For those who are longer term holders, that is less important anyway.

      • I agree.

        I'm locked in for now, too, but if it gets back up over $5.50 and/or if it looks like the junk bubble is gonna pop, then maybe I'll sell out and jump back in at a lower price, or try one of the other comparable funds.


        For now, I'm just relieved this thing is going up instead of down.

      • Well thank you sir. At least there is one peron here that is objective. What I can't understand is how loyal these people are to this fund when it is obviously being mismanaged in one of the greatest bull runs in junk for a long time.

    • what is your problem with VWEHX. Did the fund manager rape you or something?

 
VWEHX
5.80+0.02(+0.35%)Aug 27 6:25 PMEDT