Vanguard VMMXX Prime Money Market Acct.

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
coffeehubcap
Posts: 198
Joined: Wed Sep 19, 2007 7:56 pm

Vanguard VMMXX Prime Money Market Acct.

Post by coffeehubcap » Wed Feb 17, 2016 11:51 am

I thought Vanguard was going to switch/suggest we move from this fund to another MMF. Anyone else hear this info?

User avatar
Phineas J. Whoopee
Posts: 7497
Joined: Sun Dec 18, 2011 6:18 pm

Re: Vanguard VMMXX Prime Money Market Acct.

Post by Phineas J. Whoopee » Wed Feb 17, 2016 12:35 pm

They're switching brokerage account settlement to the Federal Money Market Fund, VMFXX, later this year. Here's some information from them about why. It has to do with new rules being put into place to try to avoid a repeat of one aspect, money market fund illiquidity, of the 2007-2008 financial crisis.
PJW

Geologist
Posts: 1187
Joined: Fri Jan 02, 2009 7:35 pm

Re: Vanguard VMMXX Prime Money Market Acct.

Post by Geologist » Wed Feb 17, 2016 6:29 pm

I agree with PJW that the only statement was with regard to brokerage settlement accounts. If you don't have or need one, then there is no reason to move to another money market fund. The brokerage switch will take place when you are informed to do so (in other words, there is no point to trying to make the switch early).

Alan S.
Posts: 7744
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: Vanguard VMMXX Prime Money Market Acct.

Post by Alan S. » Wed Feb 17, 2016 6:52 pm

It appears that the retail MM fund will have a higher yield due to riskier holdings. Account holder may be able to strategically shift between that fund and the govt fund based on personal and market conditions.

User avatar
Phineas J. Whoopee
Posts: 7497
Joined: Sun Dec 18, 2011 6:18 pm

Re: Vanguard VMMXX Prime Money Market Acct.

Post by Phineas J. Whoopee » Wed Feb 17, 2016 7:35 pm

I don't disagree, and don't want to sound an alarm because there's not a good reason to. That written, the Vanguard link I provided had this to say about Prime Money Market:
Gate: A money market fund's ability to temporarily suspend withdrawals during periods of financial instability for up to 10 business days in a 90-day period if weekly liquid assets drop below 30%.
It is not the good, or bad depending on one's perspective, old days. I wouldn't be concerned about it personally, but it's out there and it's a fact and it becomes the case in mid-October so there's no use ignoring it. The gate doesn't apply to federal and Treasury money market funds, which is the reason for the move in brokerage account settlement.

Institutional money market funds, which are open to individuals (all this is covered in the Vanguard link), will have floating net asset values.

PJW

knowyourbudget
Posts: 7
Joined: Tue Jul 23, 2013 7:39 pm

Re: Vanguard VMMXX Prime Money Market Acct.

Post by knowyourbudget » Wed Jun 01, 2016 9:22 pm

The switch did not come without bugs for me. :x

Post Reply