You actually do not need a bull market in treasuries for NTSX to outperform. Using Testfolio, you can set the T-Bills CAGR to remain flat at 4.65% CAGR. For example, it would have outperformed due to the rebalance bonus of the uncorrelated treasuries from January 1, 2000 to date. See backtest below.It IS a poor diversifier when compared to VTI. UNLESS interest rates go to 0% again and you get a seismic bull market in T-Bonds.
That's the whole point here. You need a huge outlier move in the bonds to get a premium over VTI. Otherwise you're just paying 17 bps extra in fees per year to own something that will look a lot like VTI.
If you're super bullish about T-Bonds then buy VTI and add zero coupon bonds for free. Why give away free money owning a fund that sounds clever, but really isn't.
https://testfol.io/?s=fij4rtUDY7P
Statistics: Posted by Lawyered_ — Wed Jan 08, 2025 4:03 pm