Adding bonds to my portfolio

Investing / Portfolios
1

Having read other threads where ppl rebalance by selling VT and buying VTI+VXUS made me think about switching my sloow DCA to bonds. I don’t want to sell to rebalance. Right now my portfolio is mostly shares+cash. I think it’s time to move some cash to bonds.
The bonds I was checking are: V3GH CHCORP and GHYC.
The first one is rather small but it seems to be less risky than for example GHYC, which I picked because I still want to see the allocation going up (my cash is currently giving 1.5% interests so I’d like to get more than that).

Is there anyone having a similar bond group? Is it overkill? I’m DCAing so the total allocation of bonds in my portfolio is atm undecided :smiley:

2

I have a pretty poor understanding of bond FUNDS, I don’t like how they fluctuate on the market.

If I was to get bonds I’d look to make a bond ladder myself, however I haven’t done any serious research, and preliminary research tells me Swiss govt bonds have basically near zero return for the effort.

3

I’d gladly do that but I probably need to check if ibkr has some kind of tutorial/documentation since every time I read about it I get confused.

Btw, I’m not building a ladder yet. I like to learn by doing, especially if I don’t lose money on the experiment.

4

I think the chance of losing money if you buy a good credit bond, bill or note (govt or even company) and hold it to maturity is next to zero (not considering inflation, which Switzerland doesn’t have). Hell, even 3-month Greek govt notes gave ~3.5% annual (around 2.5% now) and they never went bust, even in the 2012-2015 madness.

5
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6

Yeah I’d seen that, I was initially looking around EIDG bonds, but perhaps it warrants some more search.

7

When you look into bond ETFs, it might make sense to look into hedged bond ETFs or Swiss Bond ETFs.

CHCORP & AGGS are couple of them.

I think both of them will NOT yield more than 1.5% as per your target after costs.

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8

Total return of CHCORP seems to be higher than 1.5%. Dividends are low though.

1y only ofc.
I still wonder why I keep checking for bonds ETF instead of leaving that part of the portfolio on the 1.5% account…

9

Normally it’s better if dividends are lower than total return because capital gains are tax free

But I think right now CHCORP Yield to Maturity (1.07%) is lower than coupon rate 1.36%.

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10

Your 1.5% account is soon gonna be a 0.5% account though.

11

I think it would be zero soon :slight_smile:

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12

Well I don’t know. It’s not in a bank. It will go lower but I’m sure it’ll stay above 0.8%

Uhm. I thought total return includes dividends…

13

Yea total return include divideds

Total return = dividends + net capital appreciation

14

Are you saying that you said somthing wrong a couple of posts above ?

15

Actually no

I said it’s better if dividends are lower than total returns.

Let’s take an example with same total returns but different dividends

Case 1 -: dividend 1.5% capital gain 1% , total return 2.5%

Case 2 -: dividend 3.5% , capital depreciation (-)1% , total return 2.5%

Case 1 is better from tax perspective. In case 1 dividends are lower than total returns.

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