Is there a point in holding bonds?

Hello fellow Mustacians,

is there a point in holding bonds? Government bonds offer no interest and corporate bonds are correlated with the SP500.

I wanted to do an allocation 65% VWRL, 35% bonds but now I am thinking instead of bonds I should just keep 35% cash and re-balance every 3 months.

What do you have in your portfolios, bonds or cash? Which UCITS ETF is recommended to buy? I saw Vanguard is offering the following:
Global Aggregate Bond UCITS ETF (VAGP)

1 Like

Cash + mostly counting pillar 2 as “bond”.


You’d likely want something hedged to CHF (with the expected return being that of the negative CHF yield).

That is fine.

My current and future salary is in CHF (I am under 30y. old), my pillar 2 is in CHF. I would be fine with losing money in a bond due to CHF getting stronger since I will offset this with my salary being worth more.

My original question is related to the 2-fund advice often given to people, that government-bonds do not correlate well with stocks or correlate negatively.

So in a market collapse you can sell bonds which rise in value over time in order to buy stocks to re-balance your portfolio.

Since interest rates are 0 or near 0 does this still hold? Is there any benefit over holding cash that I am overlooking?

AFAIK that advice might only be useful if you hold bonds your “base” currency, otherwise it’s not really a stable/safe investment. should explore that a bit (but there’s lots of similar pdfs from e.g. vanguard).

I have a bit of cash parked into Vanguard’s BND and I kind of like it as it is quite stable and still gives back some return. Just look at March this year where VT was down over 30% BND was down 5%. I also consider my 2nd pillar as bonds but to be honest have no clue what instrument is behind them…

Anyone knows if trading view can show total returns? If so something like*USDCHF (but with total returns) should be a good demonstration of USD bonds vs. CHF cash.

This means if you have over 100,000 CHF in your cash bank account buy bonds just in case of a bank default ? (My cantonal bank has a government guarantee for 100,000)

Or open several bank accounts?

1 Like