F Fund

[Jvanhulle7]

Am I the only one curious on how the F fund drops when everything else is dropping?

My understanding is, when other stocks are dropping, S, C, I... people would typically want to buy into safer funds such as bonds.

I'm 90% F and 10% S. It's been really nice. When F is up and S is down, I'll make a decent gain. When S is up a lot (the typical 2-4% weve been seeing lately) and F is down, I normally still make at least .2-.5. I personally rather see the slow steady increase than the drastic changes we've been seeing. But I'm still confused on why F isnt doing better on the days the rest of the funds are dropping.

[DVincent]

The F Fund depends heavily on bond yields and bond prices, particularly treasury bonds. Bond yields drop when bond prices rise (they move inversely to each other), and the F Fund typically rises when this occurs. For instance, today (20 April) the F Fund rose .05% while treasury yields dropped [Using Yahoo Finance - 13 Week Treasury Bill (^IRX): -0.033; Treasury Yield 5 Years (^FVX): -0.012; Treasury Yield 10 Years (^TNX): -0.028; Treasury Yield 30 Years (^TYX): -0.039].

[Tomanyiron]

I have seen that also, and tried to find a good answer. I did find someone (wished I could remember his name), that said, when people realize that they are starting to loose huge amounts of their portfolio, they panic. And get out of everything that has any risk at all.

[McWinning]

My understanding is that there is the possibility that some small businesses, especially within the oil industry, may go bankrupt during this recession. If that happens then the stock value of that company goes to zero (or close to it depending on bankruptcy terms), but also the company defaults on much of their debt (the corporate bond). So even the F fund is under pressure if things start looking really bad for companies.

[bloobs]

Am I the only one curious on how the F fund drops when everything else is dropping?

My understanding is, when other stocks are dropping, S, C, I... people would typically want to buy into safer funds such as bonds.

I'm 90% F and 10% S. It's been really nice. When F is up and S is down, I'll make a decent gain. When S is up a lot (the typical 2-4% weve been seeing lately) and F is down, I normally still make at least .2-.5. I personally rather see the slow steady increase than the drastic changes we've been seeing. But I'm still confused on why F isnt doing better on the days the rest of the funds are dropping.

The F or the AGG/BND ETFs it is largely based on is a special animal and I am no expert on what the calculation is to determine its share price.

Having said that, the strong negative correlation between CSI and F applies most of the time. However, 2020 has been an outlier year, to be expected to happen every decade or so, such that the factors that result in this inverse relationship are skewed. In short, don't count on that outcome this time.

[Tomanyiron]

Kinda what I was saying before.

"At the epicenter of the slide is an effort to sell anything that can be sold. It’s about de-risking at breakneck speed, getting rid of anything standing between investor portfolios and solvency. The rush for the exits is breathtaking and feverish, brought on by a biological threat whose ultimate reach remains uncertain."
https://www.cnbc.com/2020/03/18/the-sto ... -sell.html

[jimcasada]

I think what you're seeing lately is a lot of foreign money leaving all the US markets. I'm banking on the traditional pattern returning soon and just switched all mine to -F- today, but I have one more potential transfer left before the end of this month.