BND vs All Treasuries vs. All Corporates

Le post compare les performances de BND, des Treasuries et des Corporates en fonction de la phase d'accumulation ou de retrait, et suggère que les Treasuries pourraient être un meilleur choix pour la phase de retrait en raison de leur faible corrélation avec les actions

I've been reading various posts on fixed income allocation. The following is embedded in numerous comments and I've replied with some of the same as well. However, creating a new post to highlight the following (probably known by many although not appreciated by all). In summary, BND is a mix of treasuries, mortgage backed securities (gov't agencies), and corporate bonds. The pros for treasuries are that they often go up when stocks go down. The negative is that the yield is lower. In contrast, corporate bonds yield more, but they are often correlated with equities in a downturn. Lastly, mortgage backed securities have a different payoff profile from straight treasuries (generally, they benefit less when rates drop - see bond convexity). When combined with equities and rebalancing a portfolio, the mix of BND has historically not been the best choice. Over the cycle during accumulation phase, it would have been better to invest in all corporates for the higher yield and live with the more serve drawdowns or invest in all treasuries for the negative correlation / rebalancing in downturns. During withdrawal mode, straight treasuries have had an advantage. Of course, past performance doesn't mean future performance will be the same. However, it is likely a reasonable assumption that corporate bonds will remain correlated with equities in a downturn. Further, the prepayment risk in mortgage backed securities will still exist, meaning they may not benefit as much as straight treasuries when rates drop (depending on how interest rates have moved, this may be less of an issue but it is still a factor). Anyways, the below used real fund returns (could go back to 1993 with these funds) so we can see the actual cost of expenses, trading, etc. Someone can also try pairing with VTSAX or VTWAX and see if things change, although I believe the general issues cited will remain. From end of 1999 to current in accumulation mode: [https://testfol.io/?s=7cRmUNLeRpY](htt