|Expense Ratio (net)||0.68%|
|Last Cap Gain||0.00|
|Morningstar Risk Rating||Average|
|Beta (5Y Monthly)||-0.40|
|5y Average Return||N/A|
|Average for Category||N/A|
|Inception Date||Sep 18, 2002|
Analysts forecasting inflation have been crying wolf for a decade, leaving bond investors inured to warnings of rising interest rates or an inflation scare. The inflation outlook right now is sanguine, with indicators suggesting only a gradual uptick. Against this backdrop, financial advisors say they have been more focused on helping retirees stretch a little more income out of yield-starved bond portfolios than guarding against fast-rising interest rates.
Coasting on very strong recent returns, it can be tempting to use your larger nest egg as a reason to pull back on your savings rate, or let a too-aggressive asset allocation ride. If you've been watching your portfolio grow by leaps and bounds for the past decade, take a moment to congratulate yourself for your part in it: your contributions, your investment selections, and your perseverance through periods of market volatility.
Not only did the Federal Reserve Open Market Committee leave interest rates unchanged at its June meeting, but the Fed indicated that it was standing ready to cut rates later this year if the economy showed signs of further weakening. You may find that your enlarged portfolio is also courting a good bit of risk, which can be particularly problematic if retirement or spending on other goals is close at hand. If you're still accumulating assets for retirement, check on whether your current portfolio balance, combined with your savings rate, puts you on track to reach whatever goal you're working toward.
The Aggressive bucket portfolios, which are geared toward new retirees who can tolerate some equity-related volatility, feature a roughly 35% allocation to bonds. The conservative versions, meanwhile, target a 60% fixed-income allocation and are geared toward retirees with shorter time horizons (life expectancies) who are drawing heavily on their portfolios for current living expenses.
One of the benefits of owning a portfolio that's composed of exchange-traded funds is that you shouldn't have to make significant changes, if any, especially if you've populated your portfolio with broad, low-cost index trackers. My assumption is that investors will do their own rebalancing to stay in sync with their asset-allocation frameworks. Thus, I'll make changes only if one of the holdings has experienced a substantive change.