Well, I was speaking of the muni version but their charts track about the same, which is to say poorly lately. Both have an average maturity of about 7 years.
Vanguard bond funds have been damn smart, conservative, investments for decades, but there's no place to hide in bonds if rates soar as they did in the 1950s thru the 1970s. Shorter average maturity is better. In the 1970s I owned money market funds when almost no one had heard of them. They were fabulous as rates rose above about 16% around 1980 (and prime rate hit 21%).
We have a generation of bond buyers who have never known anything but falling rates. They'll be in for a devastating surprise if we see rates returning to historic norms... say 4-6%. Anything leveraged will be far worse yet!
Congrats on owning low cost Vanguard products. I'm sure Buffett would agree.
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