VinoSupremo:Keep in mind that an ultra short "sister" fund (SWYPX) recently had a major withdrawal run against it and it is now a subject of a class action lawsuit.
A lack of confidence in Schwab Bonds???
I think part of it is due to the underlying securities, and the rest is a ripple effect that's being felt across its bond fund offerings.
I had SWBDX for five years or more, and it was rock-solid. I had almost a quarter of my portfolio in it during the 2001-2002 bear market and it helped me get through that with less than a 10% portfolio loss overall (both years combined). But it apparently didn't take much to bring down the house of cards.
I got out of this one when the NAV dropped from 10 to 9.62 over a three-week period. When something smells that bad in such a short time (investment-grade bonds should not lose 4% of its NAV in a stable- to declining interest rate environment), you get out. It was starting to smell like YieldPlus all over again.
I did that when SWYPX dropped from 9.68 to 9.61 last August when the subprime slime started rolling, and I did it here. And now this "alternative to cash" is down to 6.85, which even after dividends is down more than 23% YTD. I didn't lose enough in the fund to feel like I need to participate in the laswuit; I lost about 0.7% of NAV but more than made up 0.7% in increased yield over money market funds, so I got out in time to come out ahead overall. But all those people seeking higher yield in a market where safe yields were approaching zero, they got burned by the marketing and not in understanding what was starting to happen.
