Q: Is it advisable to sell HBND for a tax loss (down 13%) before year end?
If inflation looms or bond vigilantes are at work, long-term bond yields could go up from here.
Appreciate your thoughts
If inflation looms or bond vigilantes are at work, long-term bond yields could go up from here.
Appreciate your thoughts
5i Research Answer:
HBND does not tend to have big moves. Its largest monthly move in 2025 was 4.0% (down). Thus, if an investor has a loss, we think it is fine to sell for tax purposes as the 30-day move is probably not going to be enough to offset the tax benefits. Yes, bonds will likely stay volatile, and the US decides on rates today. The fund has not yet declared its December distribution date. We would be fine selling after that date (but Dec 30 or before to get 2025 settlement).