In January 2022 the interest rate for 2 year treasurys would have been .8% or 80 basis points. So you should have expected $10K to grow to about $10,160 if you had been managing your duration from 2 years to 1 year to maturity. Or investing in an individual treasury of similar duration (and reinvesting all dividends).
Since SCHO is a bond fund it would maintain a constant 2 year effective duration rather than coasting downwards to 1 year and then 0 year duration. Since interest rates have gone up significantly for 2 year treasurys between 1/2022 and 2/2024 we should expect SCHO to have lost money relative to the $10,160 the fund would have gained if interest rates had not budged.
According to portfolio visualizer an investment of $10K in SCHO on 1/2022 would be worth $10,048 on 2/2024 (including all reinvested dividends). So it seems like the jump from .8% interest rates (on 1/2022) to 4.2% interest rates (on 2/2024) cost you about $110.
Seems to make sense.
Since SCHO is a bond fund it would maintain a constant 2 year effective duration rather than coasting downwards to 1 year and then 0 year duration. Since interest rates have gone up significantly for 2 year treasurys between 1/2022 and 2/2024 we should expect SCHO to have lost money relative to the $10,160 the fund would have gained if interest rates had not budged.
According to portfolio visualizer an investment of $10K in SCHO on 1/2022 would be worth $10,048 on 2/2024 (including all reinvested dividends). So it seems like the jump from .8% interest rates (on 1/2022) to 4.2% interest rates (on 2/2024) cost you about $110.
Seems to make sense.
Statistics: Posted by dorster — Sun Feb 18, 2024 2:06 pm — Replies 12 — Views 789
