Is keeping your investment in a mutual fund above the minimum initial investment required?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
SelfEmployed123
Posts: 183
Joined: Sun Apr 15, 2018 8:57 pm

Is keeping your investment in a mutual fund above the minimum initial investment required?

Post by SelfEmployed123 » Sat Sep 29, 2018 8:11 am

This question is somewhat answered in a prior post from about 8 years ago viewtopic.php?t=49569, but the minimums are very different so I thought I'd double check.

The DW and I are saving up for a house downpayment. We hope to buy a house sometime in the middle of next year. I recently discovered the Vanguard Treasury Money Market Fund (VUSXX), which is where we have parked our house downpayment fund to earn some interest while we save. The initial minimum investment is $50,000. I really like this fund. It invests 100% in short term treasuries with an average maturity of between 2-3 months. It seems like a safer investment than the Prime Money Market Fund (VMMXX) due to 100% of the investments being with Uncle Sam.

Once we buy a house, our total amount invested in this fund will definitely fall below the initial $50,000 investment. Will I be able to keep this fund after that? I think it's a great place to keep my emergency fund, but after we buy a house we will be shifting to more tax-deferred investments. I don't see us getting above $50,000 again in that fund ever again. Thanks!
"Get what you can, and what you get hold, 'Tis the stone that will turn all your lead into gold." | -Benjamin Franklin

retiredjg
Posts: 34177
Joined: Thu Jan 10, 2008 12:56 pm

Re: Is keeping your investment in a mutual fund above the minimum initial investment required?

Post by retiredjg » Sat Sep 29, 2018 8:27 am

Interesting fund. Seems like a nice investment for your uses. I don't recall ever hearing about it before. And when I click on "browse Vanguard mutual funds by asset class", it is not listed. I've seen this before and do not know why some things are not listed. How did you happen upon it?

We do know that Vanguard is not too picky about going below the minimums in their $3k minimum funds. I've got a couple hundred dollars in one myself - been that way for at least 5 years. I've never been contacted about it.

I would expect the same thing on your fund. But who knows? You may be the test case. Good luck!

SelfEmployed123
Posts: 183
Joined: Sun Apr 15, 2018 8:57 pm

Re: Is keeping your investment in a mutual fund above the minimum initial investment required?

Post by SelfEmployed123 » Sat Sep 29, 2018 8:40 am

retiredjg wrote:
Sat Sep 29, 2018 8:27 am
Interesting fund. Seems like a nice investment for your uses. I don't recall ever hearing about it before. And when I click on "browse Vanguard mutual funds by asset class", it is not listed. I've seen this before and do not know why some things are not listed. How did you happen upon it?

We do know that Vanguard is not too picky about going below the minimums in their $3k minimum funds. I've got a couple hundred dollars in one myself - been that way for at least 5 years. I've never been contacted about it.

I would expect the same thing on your fund. But who knows? You may be the test case. Good luck!
Actually I came across the fund in this forum. I forget how I found out about it originally. If I find out I will let you know!
"Get what you can, and what you get hold, 'Tis the stone that will turn all your lead into gold." | -Benjamin Franklin

User avatar
welderwannabe
Posts: 809
Joined: Fri Jun 16, 2017 8:32 am

Re: Is keeping your investment in a mutual fund above the minimum initial investment required?

Post by welderwannabe » Sat Sep 29, 2018 8:48 am

In addition to the safety, this fund is 100% state income tax free since it invests solely in Treasuries. That can make its yield at or near that of Prime money market depending on your state income tax situation.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

Mike Scott
Posts: 1020
Joined: Fri Jul 19, 2013 2:45 pm

Re: Is keeping your investment in a mutual fund above the minimum initial investment required?

Post by Mike Scott » Sat Sep 29, 2018 8:55 am

I bet someone at Vanguard could answer that question or you could just let it ride and they will let you know sooner or later.

SelfEmployed123
Posts: 183
Joined: Sun Apr 15, 2018 8:57 pm

Re: Is keeping your investment in a mutual fund above the minimum initial investment required?

Post by SelfEmployed123 » Mon Oct 01, 2018 7:28 am

welderwannabe wrote:
Sat Sep 29, 2018 8:48 am
In addition to the safety, this fund is 100% state income tax free since it invests solely in Treasuries. That can make its yield at or near that of Prime money market depending on your state income tax situation.
I had calculated the tax-adjusted return and this fund is lower than prime money market by only 1 basis point. Seems like a no brainer to get the additional security. I will follow up with Vanguard to get the answer.
"Get what you can, and what you get hold, 'Tis the stone that will turn all your lead into gold." | -Benjamin Franklin

SelfEmployed123
Posts: 183
Joined: Sun Apr 15, 2018 8:57 pm

Re: Is keeping your investment in a mutual fund above the minimum initial investment required?

Post by SelfEmployed123 » Mon Oct 01, 2018 7:44 am

I called Vanguard this morning. A rep said that if the total fund balance falls below the minimum balance of $50,000 I would have one year to bring the balance up to the minimum. If that does not occur, they would sell me out of the fund into the settlement fund. I asked if that would still be the case for Vanguard Voyager, Voyager Select, or Flagship Services and they said it would.
"Get what you can, and what you get hold, 'Tis the stone that will turn all your lead into gold." | -Benjamin Franklin

Post Reply