Funds or Ladders?

This episode dives into the surprisingly emotional world of fixed income investing, exploring whether traditional bond funds like BND still make sense or if newer laddered bond ETFs offer a psychological edge by returning principal at a set maturity date. Don and Tom unpack how these ETFs compare to CD ladders, why capital gains should never be expected from bonds, and how investor psychology often drives the preference for “certainty.” They also congratulate Dimensional Fund Advisors on reaching $1 trillion in assets, discuss whether laddering target-date funds makes planning easier or just more complicated, and answer listener questions about transferring accounts from Morgan Stanley to Vanguard and managing tax consequences along the way.

0:04 Bonds vs. crypto — why fixed income feels boring but matters

1:02 Why bonds exist in portfolios (stability, income, not growth)

2:18 Introduction to laddered bond ETFs (Invesco, iShares, Vanguard)

3:51 Bond returns in 2025 and the “don’t expect capital gains” rule

5:03 The psychological problem with bond funds (they never mature)

6:54 How target-maturity bond ETFs differ from traditional bond funds

11:28 Yield comparisons across laddered maturities vs. BND

13:14 When laddered ETFs might make sense (income timing, certainty)

15:09 Dimensional Fund Advisors reaches $1 trillion in assets

19:57 Listener: Laddering target-date funds instead of bonds

23:19 Listener: Transferring IRA and taxable accounts to Vanguard