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G Fund vs F Fund??
- Thread starter chuckys
- Start date
Weather_n_Leather
Rising Member
- Reaction score
- 0
I know the G fund is a safe haven...but the returns are not usually very good.
In the past, I never considered the F fund (as the remaining funds had great returns). With the remaining funds losing money, I decided to move a little into the F fund.
How exactly does the F fund work? My biggest problems is that I have no real idea how the bond market works. Does the return on the F fund usually increase when Bond prices fall?
In the past, I never considered the F fund (as the remaining funds had great returns). With the remaining funds losing money, I decided to move a little into the F fund.
How exactly does the F fund work? My biggest problems is that I have no real idea how the bond market works. Does the return on the F fund usually increase when Bond prices fall?
LOL, nobody REALLY know how the F fund works. It tracks the Lehman Brothers US Aggregate Bond Index. The ticker symbol is AGG. Generally, it seems if the equity markets are down, the bond markets are up, but that's not ALWAYS the case. The F fund is something you go into in certain environments, not something short term to make money. For some reason the F fund makes money when interest rates are falling. Don't ask me. I know I made a killing with it in the previous downturn when the mini-recession hit and Greenspan was lowering interest rates. I have no idea what the connection is, unless it's simply that usually when the prime rate is falling it is doing so because of Fed action to bolster a sagging economy, with stocks down, flight to safety in bonds...but I honestly don't know. But how the F fund pays out is a mystery as well, I just know it does work when the prime is falling. I've moved out of it for a few days starting next week just in case there is a problem with the bond insurers. I just want to be super careful. Maybe someone else can give a better answer.
Both... for now. 
