Limited-term New York Muni Fund?

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Limited-term New York Muni Fund?

Postby scylla » Tue Jan 01, 2013 2:14 pm

Hello all. Right now, I have a substantial amount of money in the Vanguard Long Term Tax Exempt Muni Fund. I'd like to "hedge my bets" by putting new investments in a New York Muni Fund with a shorter duration. However, Vanguard doesn't offer one.

My two questions are:

1. Why doesn't VG offer one?
2. Is there another fund I could choose with an acceptably low expense ratio?

Thanks.
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Re: Limited-term New York Muni Fund?

Postby livesoft » Tue Jan 01, 2013 2:31 pm

What it the duration of the Vanguard NY muni fund now?

Years ago, I think they had two NY muni funds and I owned one of them. My guess is there was probably no real difference between them, so why have two?
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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Re: Limited-term New York Muni Fund?

Postby blevine » Tue Jan 01, 2013 4:43 pm

You can just use a national short duration fund if you want to diversify and reduce duration overall.
I have looked in the past and not found such a fund. Just don't think there is enough issuance
of short term debt other than for money market funds, from many individual states, NY included.

Don't forget diversification, NY was once almost bankrupt, remember
Ford to NY Drop dead !
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Re: Limited-term New York Muni Fund?

Postby livesoft » Tue Jan 01, 2013 4:50 pm

The average duration of VNYUX is reported to be 5.9 years and average maturity 6.4 years. Perhaps this fund is long-term in name only.

For comparison, VCAIX (California intermediate-term) has 5.5 and 4.9 for those numbers, while
Intermed tax-exempt VWIUX has 5.5 and 4.9 as well, with
Vanguard intermediate-term VBILX has 7.3 and 6.5.

What do you see about the NY fund that worries you?
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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Re: Limited-term New York Muni Fund?

Postby Default User BR » Wed Jan 02, 2013 5:56 pm

blevine wrote:Don't forget diversification, NY was once almost bankrupt, remember
Ford to NY Drop dead !

But they got a loan from Connecticut [1].


1. From an old Barney Miller episode.

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Re: Limited-term New York Muni Fund?

Postby Phineas J. Whoopee » Wed Jan 02, 2013 9:22 pm

blevine wrote: ... Don't forget diversification, NY was once almost bankrupt, remember
Ford to NY Drop dead !

Diversification is critical, but for the record, it was New York City specifically, not the whole of New York State.

http://www.nydailynews.com/news/politics/ford-city-drop-dead-president-snub-inspired-discouraged-ex-gov-hugh-carey-article-1.947295

Granted, any NYS-specific municipal bond fund is likely to include NYC securities, and also granted the state today faces financial challenges.

To the OP: If you wanted to stay with Vanguard and do what you asked, you could mix the NY long-term muni fund with the NY money market fund (practically return-free at the moment) to adjust your average duration however you like.

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