What to do? Vanguard Muni Funds Closed to New Investors

Have a question about your personal investments? No matter how simple or complex, you can ask it here.

What to do? Vanguard Muni Funds Closed to New Investors

Postby Frank2012 » Fri Jun 28, 2013 10:55 am

Now that that VWITX and VWIUX are closed to new investors, what should I do for Muni bond exposure in a taxable account?
Frank2012
 
Posts: 36
Joined: Fri Jan 25, 2013 8:16 pm

Re: What to do? Vanguard Muni Funds Closed to New Investors

Postby tigerman3 » Fri Jun 28, 2013 11:14 am

I don't think they are closed if you have an account at Vanguard. However, I have read that Fidelity has a good Intermediate fund: FLMTX
User avatar
tigerman3
 
Posts: 54
Joined: Tue Aug 14, 2012 1:26 am

Re: What to do? Vanguard Muni Funds Closed to New Investors

Postby Rainier » Fri Jun 28, 2013 11:26 am

When did this happen?
- Bill
User avatar
Rainier
 
Posts: 873
Joined: Thu Jun 14, 2012 6:59 am

Re: What to do? Vanguard Muni Funds Closed to New Investors

Postby stan1 » Fri Jun 28, 2013 11:30 am

Please provide a link to a source if you believe these funds are closed to new investors.
Otherwise, I think you are mistaken.
stan1
 
Posts: 3469
Joined: Mon Oct 08, 2007 5:35 pm

Re: What to do? Vanguard Muni Funds Closed to New Investors

Postby tigerman3 » Fri Jun 28, 2013 11:39 am

My Schwab account lists these as "Open to existing investors." Interestingly enough, VMLTX (Limited Term) is still listed as "open."
User avatar
tigerman3
 
Posts: 54
Joined: Tue Aug 14, 2012 1:26 am

Re: What to do? Vanguard Muni Funds Closed to New Investors

Postby rkhusky » Fri Jun 28, 2013 12:01 pm

I think it is closed to new investors who get it from a source outside of Vanguard. See: https://advisors.vanguard.com/VGApp/iip ... ure=140469 and https://institutional.vanguard.com/VGAp ... undId=0542
rkhusky
 
Posts: 1608
Joined: Thu Aug 18, 2011 9:09 pm

Re: What to do? Vanguard Muni Funds Closed to New Investors

Postby stan1 » Fri Jun 28, 2013 12:05 pm

OK, here's the explanation.
https://advisors.vanguard.com/VGApp/iip ... ngTwoFunds

The easy solution is to buy it at Vanguard.
stan1
 
Posts: 3469
Joined: Mon Oct 08, 2007 5:35 pm

Re: What to do? Vanguard Muni Funds Closed to New Investors

Postby btenny » Fri Jun 28, 2013 3:02 pm

You might also consider investing in TFI or VWAHX. Both are intermediate term muni bonds funds. TFI is the Barclay index ETF that holds a equivalent index of all muni bonds. It has a ER of .23% and a current dividend yield of 2.86%. According to Morningstar it performs better than VWITX. Or if you can take a little more risk you might also consider investing in VWAHX, Vanguards Hi Yield Tax Exempt. VWAHX has a ER of .12% for Admiral shares and a dividend yield of 3.09%. It is also rated 5 stars by Morningstar.

http://quote.morningstar.com/fund/chart ... ture=en-US

Cheers, Bill
btenny
 
Posts: 2217
Joined: Sun Oct 07, 2007 7:47 pm

Re: What to do? Vanguard Muni Funds Closed to New Investors

Postby etarini » Fri Jun 28, 2013 3:22 pm

If you're looking for a high credit quality intermediate-term muni fund (even better credit quality than VWITX/VWIUX), you might consider Baird Intermediate Municipal Bond (BMBSX, investor shares, and BMBIX, institutional shares). I have accumulated lots of VWIUX and haven't sold any, but for the last three years I've been buying BMBIX exclusively, through my Vanguard brokerage account. Although the yield is slightly lower, I feel very comfortable that the credit risk is about as low as you can get, though it should be said that the consensus among those who know more than I do about it (people like Larry Swedroe) is that VWITX/VWIUX satisfies the "take your risk on the equity side, not the bond side" guideline.

Eric
etarini
 
Posts: 475
Joined: Sun Jan 24, 2010 7:46 pm

Re: What to do? Vanguard Muni Funds Closed to New Investors

Postby Best of Both Worlds » Fri Jun 28, 2013 9:45 pm

I inadvertantly broke this news in another thread when discussing closed and CEFs. I too was surprised to learn that it was closed to new investors except when purchasing through VG.
Best of Both Worlds
 
Posts: 44
Joined: Mon Apr 29, 2013 7:10 pm

Re: What to do? Vanguard Muni Funds Closed to New Investors

Postby tigerman3 » Sat Jun 29, 2013 11:21 am

With respect to the suggestion of possibly buying an ETF instead, I would note that some in the past have voiced concern over increased volatility of ETF's due to on-demand liquidity issues. In the figure below, blue is Vanguard Intermediate, orange is Baird Intermediate and Green is Barclays ETF (TFI). Over the long term, the differences probably aren't all that significant.

Image
User avatar
tigerman3
 
Posts: 54
Joined: Tue Aug 14, 2012 1:26 am

Re: What to do? Vanguard Muni Funds Closed to New Investors

Postby Default User BR » Sat Jun 29, 2013 12:52 pm

It does raise the question as to whether these funds are transferable to other custodians.


Brian
Default User BR
 
Posts: 7503
Joined: Mon Dec 17, 2007 8:32 pm

Re: What to do? Vanguard Muni Funds Closed to New Investors

Postby btenny » Sat Jun 29, 2013 2:07 pm

TIger I suggest you do some more research. TFI did not exist before September 2007. I suspect you are looking at some other benchmark.

Bill
btenny
 
Posts: 2217
Joined: Sun Oct 07, 2007 7:47 pm

Re: What to do? Vanguard Muni Funds Closed to New Investors

Postby tigerman3 » Sun Jun 30, 2013 12:13 am

Bill, thank you. I double checked. The chart is from Morningstar. It only goes back 6 months to January 2013, which is why I said that long term the differences may be less significant.

Tiger
User avatar
tigerman3
 
Posts: 54
Joined: Tue Aug 14, 2012 1:26 am


Return to Investing - Help with Personal Investments

Who is online

Users browsing this forum: thedeadlybishop, Yahoo [Bot] and 16 guests