Why?
I'm not questioning the yield percentage, which I know has dropped; it's the dollar amounts that puzzle me. I'd have expected the price of VWEAX to have risen (it's increased 1.71% in that time period), and the dividend amounts to have stayed relatively flat. After all, the bonds still exist like when I bought the fund.
Or do they still exist? Are companies redeeming their old bonds and issuing new ones at the current lower yields?
After all, the bonds still exist like when I bought the fund.
Some of them do (or most of them, or none of them, depending on how long ago you bought the fund). Each individual bond has a maturity date. Some of the bonds the fund held when you purchased it have likely matured, and some of the bonds it holds now likely hadn't been issued when you bought it.
Since interest rates have gone down, older bonds with higher interest rates that have matured have been replaced with newer bonds with lower rates.
There are different moving parts in this.
When interest rates drop, bond prices rise. That's a good thing for the fund owner.
But as existing bonds in the portfolio mature, new purchases offer lower coupons (lower yield).
