May 3rd, 2009
What’s in My Portfolio: Vanguard GNMA Fund
This is the fourth in a series of articles in which I take a quick look at all of the stocks, mutual funds, and exchange traded funds in my portfolio. Today we’ll take a look at my favorite bond fund, the Vanguard GNMA fund. This fund makes up about 12.5% of my total portfolio (about another 12.5% is taken up by the previously mentioned Vanguard Total Bond Market Index VBMFX).
The Vanguard GNMA Fund is a high quality bond fund that invests a minimum of 80% of its assets into Government National Mortgage Association (GNMA or Ginnie Mae) certificates–these, unlike Freddie Mac or Fannie Mae certificates are directly backed (rather than just implicitly backed) by the federal government, meaning your risk of default is about as close to zero as possible.
As usual, this is a low expense fund as you would expect from Vanguard (0.21% expense ratio); like the other Vanguard funds it also requires a $3,000 minimum investment in non-401(k) type accounts which may make it difficult for the beginning investor to afford. Unfortunately, I do not know of a ETF equivalent for this fund, although there are other GNMA funds to consider (such as one I’ll be mentioning later).
The best part about this fund is its yield of 4.71%. I consider both it and VBMFX to be great for the bond portion of your portfolio. I had to go through my 403(b) brokerage option to get it, but it was well worth doing.
[...] admin placed an observative post today on What's in My Portfolio: Vanguard GNMA Fund | Uncommon CentsHere’s a quick excerptAs usual, this is a low expense fund as you would expect from Vanguard (0.21% expense ratio); like the other Vanguard funds it also requires a $3000 minimum investment in non-401(k) type accounts which may make it difficult for the … [...]