About 2 years ago, I figured BND would make a reasonable and more liquid substitute for holding actual bonds; either from the Treasury or (whatever else). After legging into the position over several months (largest purchase was January 2021 when I decided I'd been delaying long enough) and reinvesting the dividends and at least one portfolio allocation adjustment, I am down about 12% on BND.
This is not the performance I was expecting. I did initially buy in when rates were poised to go down which, as I understood at the time, meant Bond Funds would lose value. So some decline was expected (hence reinvesting dividends).
I do note that the percentage I'm down is about the same as a quick check of 2019-to-now's inflation rate.
Should I have expected BND to drop at about the rate of inflation? What do you think I should expect in the upcoming world of rising interest rates?
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