What influence does 30-Year T-Bond Yield have on the Vanguard Total Bond Market Index Fund (VBMFX)?
The 30-Year T-Bond Yield ($TYX on Stockcharts) has been in a downward slide since 1982. If it makes a major turn and begins a 20-year upward move, what would that do to the Vanguard Total Bond Market Index Fund (VBMFX)?
I’m more interested in knowing about how the 30-Year T-Bond Yield would have an influence, not a 5-Year.
If you look at the distribution of bonds in this fund, you will see most of the bonds have a maturity less than 10 years. The movement of the 5 yield treasury note would correlate better with this bond fund. ($FVX))
However, bond rates tend to move together, so if the 30 year bond moves one way, the 5 year bond and the Vanguard fund will usually follow.