Vanguard Municipal Money Market VMSXX 1.39%

xiangan55 · Post by **xiangan55** » Wed Mar 25, 2020 6:50 pm

Schwab Municipal Money Market funds show some pretty high yields...

SWYXX shows 7.72% TEY, California (SWKXX) is 6.92% ?

https://www.schwab.com/public/schwab/in ... #municipal

Kevin M · Post by **Kevin M** » Wed Mar 25, 2020 7:10 pm

xiangan55 wrote: ↑Wed Mar 25, 2020 6:50 pm Schwab Municipal Money Market funds show some pretty high yields...

SWYXX shows 7.72% TEY, California (SWKXX) is 6.92% ?

https://www.schwab.com/public/schwab/in ... #municipal

The TEYs assume the highest marginal tax rates, so aren't applicable to most people. Better to show the SEC yields and let people calculate their own TEYs. Here are SEC yields as of 3/24:

Schwab Municipal Money Fund Investor Shares (SWTXX) 3.61%
Schwab California Municipal Money Fund™ – Investor shares (SWKXX) 3.13%
Schwab New York Municipal Money Fund™ – Investor Shares (SWYXX) 3.82%

The national muni fund yield of 3.61% is in the same ballpark as the Vanguard national muni MM yield of 3.77% on that date.

The Vanguard muni MM fund SEC yield rose to 4.05% today.

Kevin

Kevin M · Post by **Kevin M** » Wed Mar 25, 2020 7:23 pm

Leif wrote: ↑Wed Mar 25, 2020 1:44 pm Also interesting is VMSXX 7 day is 3.77%. Fidelity Muni MM, FTEXX, is 4.12%. Maybe that does not include the ER. Vanguard is 15 bps. Fidelity is 50 bps.

SEC yields are net of the ER. My conclusion is that the higher SEC yield of the Fidelity fund reflects holding riskier assets, especially given the significantly higher ER Note that Fidelity shows the ER as 0.42%, not 0.50%, but that's still almost 3X the Vanguard ER. My guess is that Fidelity holds riskier assets to help offset the higher ER, appearing to make the fund more competitive with Vanguard.

Also note that the Fidelity fund had 48.49% subject to AMT as of 1/31/2020, while the Vanguard fund had 16.5% subject to AMT as of 2/29/2020. This will reduce the TEY of the Fidelity fund for those subject to AMT. Maybe this also is part of the explanation of the higher SEC yield.

Kevin

Leif · Post by **Leif** » Wed Mar 25, 2020 8:01 pm

Kevin M wrote: ↑Wed Mar 25, 2020 7:23 pm SEC yields are net of the ER. My conclusion is that the higher SEC yield of the Fidelity fund reflects holding riskier assets, especially given the significantly higher ER Note that Fidelity shows the ER as 0.42%, not 0.50%, but that's still almost 3X the Vanguard ER.
Kevin

Your right on the ER. I guess because I was looking at two funds. I ended up using FCFXX, Fidelity California MM. The ER on that is 50 bps. The seven day is 4.49%. Thanks for letting me know this is after ER. Makes it easier to compare.

Kevin M · Post by **Kevin M** » Wed Mar 25, 2020 8:28 pm

Leif wrote: ↑Wed Mar 25, 2020 8:01 pm Thanks for letting me know this is after ER. Makes it easier to compare.

I believe this is exactly why the SEC mandates that mutual funds report SEC yield (7-day for MM funds, 30-day for other funds) using a standard formula.

Kevin

Leif · Post by **Leif** » Wed Mar 25, 2020 8:32 pm

I'm tempted to move my Fidelity Short Term Treasury, FUMBX to FCFXX. FUMBX has a 30 day yield of 0.71% (down from 1.33% on 2/29), but it is subject to a NAV change, for better or worse. Not normal to have a Muni in a retirement account, but I did it before in the GFC.

am · Post by am » Thu Mar 26, 2020 9:51 am

4.05% sec yield on vanguard muni market! Isn’t fed buying bonds to keep market liquid? It’s getting so tempting to transfer in money but am worried that there will be a lock on money or worse if conditions decline. NAV is below a dollar. What do others think?

indexfundfan · Post by **indexfundfan** » Thu Mar 26, 2020 10:06 am

I have been wanting to liquidate the VG Short Term Treasury VFIRX for some time.

I plan to use this opportunity to exchange VFIRX to the VG Municipal MMF (VMSXX) today. At the time of writing, VFIRX looks to hit an all-time high today.

I will keep a close watch on the "Weekly liquid assets" level of VMSXX

https://investor.vanguard.com/mutual-fu ... olio/vmsxx

While it has fallen from the 70%+, it is still a healthy 65%. Read the following document for the steps that the fund manager is required to / can take if this percentage drops too much. The first action happens if this percentage drops to 30% -- for example at 30%, there could be a redemption gate or liquidity fee. I am comfortable with the 65% now.

https://www.fidelity.com/bin-public/060 ... et-MFs.pdf

am · Post by am » Thu Mar 26, 2020 10:16 am

indexfundfan wrote: ↑Thu Mar 26, 2020 10:06 am I have been wanting to liquidate the VG Short Term Treasury VFIRX for some time.

I plan to use this opportunity to exchange VFIRX to the VG Municipal MMF (VMSXX) today. At the time of writing, VFIRX looks to hit an all-time high today.

I will keep a close watch on the "Weekly liquid assets" level of VMSXX

https://investor.vanguard.com/mutual-fu ... olio/vmsxx

While it has fallen from the 70%+, it is still a healthy 65%. Read the following document for the steps that the fund manager is required to / can take if this percentage drops too much. The first action happens if this percentage drops to 30% -- for example at 30%, there could be a redemption gate or liquidity fee. I am comfortable with the 65% now.

https://www.fidelity.com/bin-public/060 ... et-MFs.pdf

Thanks for that info. I wonder if money has been flowing out because of fear/risk or cash needs of holders of this fund? Seems like we are a long way from fees or locks in redemptions. What’s your opinion as to the duration of these insane yields?

indexfundfan · Post by **indexfundfan** » Thu Mar 26, 2020 10:20 am

am wrote: ↑Thu Mar 26, 2020 10:16 amThanks for that info. I wonder if money has been flowing out because of fear/risk or cash needs of holders of this fund? Seems like we are a long way from fees or locks in redemptions. What’s your opinion as to the duration of these insane yields?

Weeks at most. I had wanted to move my money out from VFIRX to CDs or FDIC online savings. But I will keep it in VMSXX while these insane yields last.

Leif · Post by **Leif** » Thu Mar 26, 2020 12:23 pm

Looks like Fidelity California Municipal MM (FCFXX) weekly liquidity is at 73% yesterday (3/25). Thanks for pointing out this measure. I had never heard of it before.

am · Post by am » Thu Mar 26, 2020 12:24 pm

Is this a free lunch? Will the upcoming March distribution reflect this high yield?

BSBHead · Post by **BSBHead** » Thu Mar 26, 2020 12:37 pm

Munis have a lag in rates and are thinly traded. Look at MSRB/SIFMA website and you can see volatility of resets. Market investors have been perceiving increasing risk due to unfunded pension liabilities from state/local govt entities resulting from declining equity markets and zero interest rate environment. Airports, hospitals, senior care, educational institutions all issue muni debt, so lots of uncertainty there. Fed will improve liquidity, but I don’t know if they are backstopping underlying risk. The question is what the yield should be with a normal liquidity environment.

indexfundfan · Post by **indexfundfan** » Thu Mar 26, 2020 12:49 pm

am wrote: ↑Thu Mar 26, 2020 12:24 pm Will the upcoming March distribution reflect this high yield?

It should. Vanguard's MMF (and I think MMFs in general) declare the dividends daily, but are credited and posted monthly.

indexfundfan · Post by **indexfundfan** » Thu Mar 26, 2020 12:54 pm

Looking at another MMF, which provides the yield history, the daily yield spike started on 3/18. I think it will last at most another week or two.

am · Post by am » Thu Mar 26, 2020 12:59 pm

indexfundfan wrote: ↑Thu Mar 26, 2020 12:54 pm Looking at another MMF, which provides the yield history, the daily yield spike started on 3/18. I think it will last at most another week or two.

That’s free money if it lasts a week. Just initiated a transfer to the fund.

Kevin M · Post by **Kevin M** » Thu Mar 26, 2020 3:11 pm

am wrote: ↑Thu Mar 26, 2020 12:24 pm Is this a free lunch? Will the upcoming March distribution reflect this high yield?

I answered the second question in a related thread:

Kevin M wrote: ↑Wed Mar 25, 2020 4:54 pm
oaktownesq wrote: ↑Wed Mar 25, 2020 3:52 pm These high "yields" have yet to be reflected in an actual March *distribution* from any of these funds, as far as I can tell.

If the high yield is simply a product of falling prices on the thinly traded underlying securities, and these funds are cycling in and out to maintain the $1.0000, how *mechanically* is that supposedly high yield going to be translated into an actual March or April or May distribution that equals the listed yields?

Serious question, not snarky!
From the Vanguard website:
The SEC yield for a money market fund is calculated by annualizing its daily income distributions for the previous 7 days.
So these yields represent actual "income distributions" that the fund owners have accrued over the previous 7 days. You can actually view your accrued dividends in the "Balances by date" screen. You can use the difference between accrued dividends on two subsequent dates to calculate your annualized yield for the most recent day, but you must have a large enough balance to get the necessary precision.

I've actually done this for MM funds in which I've had large balances, and I was able to calculate a 7-day SEC yield that agreed with the published SEC yield by annualizing the accrued dividends over 7 days.

I have a few thousand dollars in Treasury MM that I'll exchange most of into muni MM fund tomorrow if the yield still is high enough today, then will calculate the daily yield in a few days (latest date available in Balances by date is previous day, so I think I'll be able to see two days of accrued dividends as of Friday on Saturday). I'm not sure it's enough to get enough precision to exactly match the SEC yield with 7 days of accrued dividends, but I think it will get in the ballpark. I wish I had thought of doing this a few days ago, as it's not enough money that I'm worried about getting locked up due to liquidity gate or whatever.

The March distribution yield will include the high yields we've seen in recent days, but also the much lower yields for more than the first half of the month, starting at 1.08% for VMSXX, and only up to 1.26% on 3/18 before the big ramp began on 3/19. The average of the SEC yields from 3/1 through 3/24 is 1.50%, so if there were a distribution yesterday, that would be in the ballpark of the distribution yield calculated for that time period.

Kevin

Kevin

Kevin M · Post by **Kevin M** » Thu Mar 26, 2020 3:23 pm

indexfundfan wrote: ↑Thu Mar 26, 2020 12:54 pm Looking at another MMF, which provides the yield history, the daily yield spike started on 3/18. I think it will last at most another week or two.

Vanguard also provides yield history. From the other thread on muni MM yields:

Kevin M wrote: ↑Tue Mar 24, 2020 8:00 pm The craziness continues:

Vanguard muni MM yield jumped another 40 bps today from 3.37% to 3.77%. CA muni MM increase since the spike began has been less, but still significant.

I included limited-term and intermediate term muni funds to show that while these yields also have increased, their increases are nothing compared to the muni MM fund yields.

I included Prime MM as a baseline money market yield, which as we see has continued to gradually decline.

Kevin

This chart was from two days ago. Muni MM yield jumped to 4.05% yesterday. We will know what happened today in a few hours.

I also have been posting that I don't expect these crazy high yields to last for long, and am surprised they have continued despite the Fed buying short-term munis. We may need to wait till next week to see the full effect of the Fed buying, as MM SEC yields are a trailing 7-day average. On Saturday I should be able to calculate the daily yield by looking at the difference in accrued dividends between today and tomorrow, as I exchanged a few thousand dollars into VMSXX today.

Kevin

DanFromNewYork · Post by **DanFromNewYork** » Thu Mar 26, 2020 4:56 pm

I have some money in the NY muni money market at vanguard and computed the daily yield from my accrued dividends (if I average over 7 days I match the posted SEC yields). It looks like the yield peaked on the 19th and has only slowly been decreasing. The daily yield was 3.48% as of yesterday.

renegade06 · Post by **renegade06** » Thu Mar 26, 2020 5:49 pm

[Thread merged into here, see below. --admin LadyGeek]

White Coat Investor pointed out today that those in high tax brackets should move cash from the Prime Money Market to Vanguard Municipal Money Market (VMSXX) which is showing a 4.05% 7 day yield. Question - any drawbacks to doing this?

jwc1754 · Post by **jwc1754** » Thu Mar 26, 2020 5:59 pm

[Thread merged into here, see below. --admin LadyGeek]

Noticing that VMSXX yield is much higher than VMMXX now. Will this be continue for a while? Is this a time to move from VMMXX to VMSXX?

Call_Me_Op · Post by **Call_Me_Op** » Thu Mar 26, 2020 6:07 pm

MM yields can change quickly.

renegade06 · Post by **renegade06** » Thu Mar 26, 2020 6:08 pm

I was wondering the same thing. White Coat Investor tweeted it our earlier that he is shifting his cash to VMSXX. I was just curious if that fund is very risk for cash. It doesn’t seem to be the case (from Vanguard’s website) but I was also curious what others think

renegade06 · Post by **renegade06** » Thu Mar 26, 2020 6:09 pm

Call_Me_Op wrote: ↑Thu Mar 26, 2020 6:07 pm MM yields can change quickly.

How often do they typically change?

Call_Me_Op · Post by **Call_Me_Op** » Thu Mar 26, 2020 6:21 pm

renegade06 wrote: ↑Thu Mar 26, 2020 6:09 pm
Call_Me_Op wrote: ↑Thu Mar 26, 2020 6:07 pm MM yields can change quickly.
How often do they typically change?

I'm not sure about that - but I suspect the funds that hold TBills (for example) will be seeing yields go to zero very soon. Bottom line is don't expect the fund company to take a loss for long. The YTM of the underlying securities minus expense ratio will drive the rate offered on money market funds.

Thesaints · Post by **Thesaints** » Thu Mar 26, 2020 6:38 pm

The only drawback in following the highest MM rate daily is generally wasting your time for a few bucks.
However, if one has fun doing that, by all means!

mhalley · Post by **mhalley** » Thu Mar 26, 2020 7:32 pm

Increased yield equals increased risk, but it is rare for mm funds to break the buck.
https://seekingalpha.com/article/433384 ... aking-buck

indexfundfan · Post by **indexfundfan** » Thu Mar 26, 2020 7:42 pm

Already discussed at length in another thread

viewtopic.php?f=10&t=246263&start=362

Noobvestor · Post by **Noobvestor** » Thu Mar 26, 2020 7:42 pm

renegade06 wrote: ↑Thu Mar 26, 2020 5:49 pm White Coat Investor pointed out today that those in high tax brackets should move cash from the Prime Money Market to Vanguard Municipal Money Market (VMSXX) which is showing a 4.05% 7 day yield. Question - any drawbacks to doing this?

Can you link the thread where the recommendation was made? Curious to see the discussion around it (and can't seem to find it).

renegade06 · Post by **renegade06** » Thu Mar 26, 2020 7:44 pm

Noobvestor wrote: ↑Thu Mar 26, 2020 7:42 pm
renegade06 wrote: ↑Thu Mar 26, 2020 5:49 pm White Coat Investor pointed out today that those in high tax brackets should move cash from the Prime Money Market to Vanguard Municipal Money Market (VMSXX) which is showing a 4.05% 7 day yield. Question - any drawbacks to doing this?
Can you link the thread where the recommendation was made? Curious to see the discussion around it (and can't seem to find it).

https://twitter.com/WCInvestor/status/1 ... 56864?s=20

Post by **LadyGeek** » Thu Mar 26, 2020 7:46 pm

^^^ FYI - That's a twitter feed (not a forum discussion).

I merged renegade06's and jwc1754's threads into the on-going discussion. The combined thread is in the Investing - Theory, News & General forum (theory).

Noobvestor · Post by **Noobvestor** » Thu Mar 26, 2020 7:51 pm

LadyGeek wrote: ↑Thu Mar 26, 2020 7:46 pm ^^^ FYI - That's a twitter feed (not a forum discussion).

I merged renegade06's and jwc1754's threads into the on-going discussion. The combined thread is in the Investing - Theory, News & General forum (theory).

Thanks, LadyGeek - much easier/cleaner to have all of this in one place. And thanks to Renegade for linking the tweet!

the way · Post by **the way** » Thu Mar 26, 2020 8:04 pm

Somehow this talk reminds me of when the water drains out before a tsunami and people just point in wonder or run down to the beach to pick up shells. (similar tone, hopefully different outcome!)

Kevin M · Post by **Kevin M** » Thu Mar 26, 2020 8:06 pm

As I'm sure many have noticed, there is another very similar, newer thread discussing muni money market fund yields in general: What's happening with Muni Money Market fund yields?. It may not make sense to merge the threads, but I'm posting in both daily, since the discussions are very similar, and something very relevant to one thread may be posted in the other one. Also, the title of the other thread is much more relevant to what's going on now. The title of this thread seems obsolete.

Kevin

Kevin M · Post by **Kevin M** » Sat Mar 28, 2020 3:47 pm

Kevin M wrote: ↑Thu Mar 26, 2020 3:23 pm <snip>
We may need to wait till next week to see the full effect of the Fed buying, as MM SEC yields are a trailing 7-day average. On Saturday I should be able to calculate the daily yield by looking at the difference in accrued dividends between today and tomorrow, as I exchanged a few thousand dollars into VMSXX today.

Kevin

Leif · Post by **Leif** » Sat Mar 28, 2020 5:25 pm

Kevin M wrote: ↑Sat Mar 28, 2020 3:47 pm
Kevin M wrote: ↑Thu Mar 26, 2020 3:23 pm <snip>
We may need to wait till next week to see the full effect of the Fed buying, as MM SEC yields are a trailing 7-day average. On Saturday I should be able to calculate the daily yield by looking at the difference in accrued dividends between today and tomorrow, as I exchanged a few thousand dollars into VMSXX today.

Kevin

Thanks Kevin for sharing this information. I'm also keeping an eye on posts in the sister thread:

What's happening with Muni Money Market fund yields?

indexfundfan · Post by **indexfundfan** » Sun Mar 29, 2020 6:40 am

Kevin M wrote: ↑Sat Mar 28, 2020 3:47 pm
Kevin M wrote: ↑Thu Mar 26, 2020 3:23 pm <snip>
We may need to wait till next week to see the full effect of the Fed buying, as MM SEC yields are a trailing 7-day average. On Saturday I should be able to calculate the daily yield by looking at the difference in accrued dividends between today and tomorrow, as I exchanged a few thousand dollars into VMSXX today.

Kevin

Kevin, may I know how do you find out the accrued dividends that you earned? I could not find this information on the Vanguard website.

Kevin M · Post by **Kevin M** » Sun Mar 29, 2020 12:33 pm

indexfundfan wrote: ↑Sun Mar 29, 2020 6:40 am Kevin, may I know how do you find out the accrued dividends that you earned? I could not find this information on the Vanguard website.

On the Balances and holdings page, select Balances by date tab at the top. It will default to the previous business day (e.g., if you do it now, it will default to Friday 3/27). You can then change the date to one day prior or later to see the amount the accrued dividend increased from one day to the next.

Note that you can select a weekend day, for example now you can select Saturday 3/28, and it will show you the accrued dividends for that date, and although the displayed date will revert to the previous business day, in this case 3/27, it will show you the accrued dividends as of the selected weekend day.

Kevin

indexfundfan · Post by **indexfundfan** » Sun Mar 29, 2020 3:20 pm

Kevin M wrote: ↑Sun Mar 29, 2020 12:33 pm On the Balances and holdings page, select Balances by date tab at the top. It will default to the previous business day (e.g., if you do it now, it will default to Friday 3/27). You can then change the date to one day prior or later to see the amount the accrued dividend increased from one day to the next.

Note that you can select a weekend day, for example now you can select Saturday 3/28, and it will show you the accrued dividends for that date, and although the displayed date will revert to the previous business day, in this case 3/27, it will show you the accrued dividends as of the selected weekend day.

Kevin

Thanks! It didn't occur to me to click on the "Balance by date" tab.

indexlover · Post by **indexlover** » Sun Mar 29, 2020 3:56 pm

2 questions if someone could explain please

I went to https://investor.vanguard.com/mutual-fu ... olio/vmsxx and looked at the "Portfolio and Management" tab

1) What does it mean when Daily market value is less than $1.00 for e.g $0.9986 on March 20 ? Does it mean if i sold my 10,000 shares on March 20th , i would have got $9986 instead of $10000 ?

2) what does "daily liquid assets" 0.00 % mean ?

https://investor.vanguard.com/mutual-fu ... olio/vmfxx

When i compared VMSXX vs the settlement fund VMFXX i noticed that daily liquid assets has non zero % value and also daily market value is more than $1 , but i don't think you get more or less than $1 when u sell or buy .. no discounts etc . So, i am no sure i understand this concept.

Thanks for you help

Kevin M · Post by **Kevin M** » Sun Mar 29, 2020 4:02 pm

indexlover wrote: ↑Sun Mar 29, 2020 3:56 pm 2 questions if someone could explain please

I went to https://investor.vanguard.com/mutual-fu ... olio/vmsxx and looked at the "Portfolio and Management" tab

1) What does it mean when Daily market value is less than $1.00 for e.g $0.9986 on March 20 ? Does it mean if i sold my 10,000 shares on March 20th , i would have got $9986 instead of $10000 ?

No. The fund maintains a constant price of $1 despite small fluctuations in NAV. You would get $10K (at least as of now).

Kevin

Kevin M · Post by **Kevin M** » Sun Mar 29, 2020 4:56 pm

indexlover wrote: ↑Sun Mar 29, 2020 3:56 pm 2) what does "daily liquid assets" 0.00 % mean ?

https://investor.vanguard.com/mutual-fu ... olio/vmfxx

When i compared VMSXX vs the settlement fund VMFXX i noticed that daily liquid assets has non zero % value and also daily market value is more than $1 , but i don't think you get more or less than $1 when u sell or buy .. no discounts etc . So, i am no sure i understand this concept.

If you click on the table header for that column, you'll see this definition:

Daily liquid assets generally consist of government securities, cash, and assets that will mature within 1 business day.

So this seems to mean that they don't have more than 0.00% of assets that mature within 1 business day. Nevertheless, they have managed to meet daily redemptions of as much as $217M (on 3/17) while maintaining the $1 price.

The fund had $18.2B in assets as of 2/29, so a redemption of $217,410,117 on 3/17 would be about 1.2% of assets. If the 0.00% daily liquidity number is the whole picture, that means that they'd have to sell assets to meet redemptions. Or maybe they can borrow from some slush fund within Vanguard for a couple of days.

Looking at their holdings as of the end of Feb 2020, the second largest holding is Vanguard Municipal Cash Management Fund with an effective maturity of 03/02/2020 and a value of $442,171,262.30, which is 2.43% of $18.2B. Note that the last business day of Feb was Friday, and 3/2/2020 is the following Monday, so I don't know why this doesn't count toward the daily liquidity.

At any rate, with respect to liquidity gates and redemption fees, it's the weekly liquidity that matters:

Liquidity fees and gates are tools to help money market fund managers keep the funds stable during times of extreme market duress. Under the rules:

A fund may impose a fee of up to 2% on redemptions if a fund's weekly liquid assets fall below 30% of its total assets.

A fund must impose a 1% fee on redemptions (with the option of imposing a fee of up to 2%) if a fund's weekly liquid assets fall below 10% of its total assets—unless the fund's board determines a fee would not be in the fund's best interest.

A fund may impose a gate—that is, suspend redemptions—for up to 10 business days in a 90-day period.

The fees and gates rules only apply to retail and institutional funds, although government funds may voluntarily adopt them if the fees and gates are previously disclosed to investors.

The boards of directors of Vanguard's government funds have decided to impose neither fees nor gates.

Note that weekly liquidity for VMSXX is about 67%, so well above the first trigger of 30%. The lowest weekly liquidity I see in recent weeks is 65.78% on 3/24.

Kevin

indexlover · Post by **indexlover** » Sun Mar 29, 2020 9:29 pm

Thank you Kevin for your continued invaluable contribution to this thread and thank you for responding to my query.

I did some googling and looks like at least 10% of a money market mutual fund’s total assets must qualify as daily liquid assets.

I found this information in this link :

https://www.fidelity.com/bin-public/060 ... ossary.pdf
"Glossary of Key Terms for Money Market Mutual Fund Regulation"

Daily and weekly fund liquidity: Measures of a money market mutual fund’s ability to meet shareholder redemptions, often stated as a percentage of total money market mutual fund assets. Although not a new term, the definition of weekly liquid assets helps investors understand when redemption restrictions may be imposed.
• Daily liquid assets: Cash, direct obligations of the U.S. government, securities that will mature or are subject to a demand feature that is exercisable and payable within one business day, and receivables scheduled to be paid within one business day. At least 10% of a money market
mutual fund’s total assets must qualify as daily liquid assets.
• Weekly liquid assets: Daily liquid assets, government agency discount notes with remaining maturities of 60 days or less, securities that will mature or are subject to a demand feature that is exercisable and payable within five business days, and receivables scheduled to be paid within five business days. At least 30% of a money market mutual fund’s total assets must qualify as weekly liquid assets.

Kevin M · Post by **Kevin M** » Mon Mar 30, 2020 4:15 pm

indexlover wrote: ↑Sun Mar 29, 2020 9:29 pm I did some googling and looks like at least 10% of a money market mutual fund’s total assets must qualify as daily liquid assets.

I found this information in this link :

https://www.fidelity.com/bin-public/060 ... ossary.pdf
"Glossary of Key Terms for Money Market Mutual Fund Regulation"

<snip>
• Daily liquid assets: Cash, direct obligations of the U.S. government, securities that will mature or are subject to a demand feature that is exercisable and payable within one business day, and receivables scheduled to be paid within one business day. At least 10% of a money market
mutual fund’s total assets must qualify as daily liquid assets.
<snip>

It seems to me that either this cannot be correct, or Vanguard is publishing inaccurate information regarding daily liquid assets for VMSXX. I found this, https://www.sec.gov/rules/final/2010/ic-29132.pdf, which states:

More specifically, we are amending rule 2a-7 to require all taxable money market funds to hold at least 10 percent of their total assets in “daily liquid assets” and all money market funds to hold at least 30 percent of their total assets in “weekly liquid assets.”

So it seems that the Fidelity document is not quite accurate, and that the minimum 10% in daily liquid assets applies only to taxable MM funds.

Kevin

Kevin M · Post by **Kevin M** » Mon Mar 30, 2020 4:24 pm

And we also can look directly at relevant paragraph in the CFR, https://www.law.cornell.edu/cfr/text/17/270.2a-7:

(ii) Minimum daily liquidity requirement. The money market fund may not acquire any security other than a daily liquid asset if, immediately after the acquisition, the fund would have invested less than ten percent of its total assets in daily liquid assets. This provision does not apply to tax exempt funds.

(underline mine)

Kevin

retiringwhen · Post by **retiringwhen** » Tue Mar 31, 2020 7:12 am

My question was exactly how to find daily accrued dividends on the Vanguard site......

Kevin M wrote: ↑Thu Mar 26, 2020 3:11 pm So these yields represent actual "income distributions" that the fund owners have accrued over the previous 7 days.

You can actually view your accrued dividends in the "Balances by date" screen.

You can use the difference between accrued dividends on two subsequent dates to calculate your annualized yield for the most recent day, but you must have a large enough balance to get the necessary precision.

Kevin

Thanks for this explanation. I couldn't remember how to do this. I am posting the text this way for other folks who may have missed this gem in your longer post!

watchnerd · Post by **watchnerd** » Sun Apr 12, 2020 11:10 am

Swapping Treasury MM (VUSXX) for Muni MM (VMSXX) now that T-bills are going towards 0 yield and Fed is backstopping muni money markets.

Granted, no state tax in WA. But...

1.83% tax equivalent (or better depending on income fluctuations) for me beats any new CD I can get at Ally right now.

indexfundfan · Post by **indexfundfan** » Sun Apr 12, 2020 11:23 am

watchnerd wrote: ↑Sun Apr 12, 2020 11:10 am Swapping Treasury MM (VUSXX) for Muni MM (VMSXX) now that T-bills are going towards 0 yield and Fed is backstopping muni money markets.

Granted, no state tax in WA. But...

1.83% tax equivalent (or better depending on income fluctuations) for me beats any new CD I can get at Ally right now.

The daily yield of VMSXX has dropped below 1%. I believe reading in the other thread that the yield is about 0.7%.

watchnerd · Post by **watchnerd** » Sun Apr 12, 2020 11:32 am

indexfundfan wrote: ↑Sun Apr 12, 2020 11:23 am
watchnerd wrote: ↑Sun Apr 12, 2020 11:10 am Swapping Treasury MM (VUSXX) for Muni MM (VMSXX) now that T-bills are going towards 0 yield and Fed is backstopping muni money markets.

Granted, no state tax in WA. But...

1.83% tax equivalent (or better depending on income fluctuations) for me beats any new CD I can get at Ally right now.
The daily yield of VMSXX has dropped below 1%. I believe reading in the other thread that the yield is about 0.7%.

Still better than T-bills.

But, yes, we'll see how long it takes to show up at the 7 day yield level.

Leif · Post by **Leif** » Sun Apr 12, 2020 1:48 pm

watchnerd wrote: ↑Sun Apr 12, 2020 11:10 am Swapping Treasury MM (VUSXX) for Muni MM (VMSXX) now that T-bills are going towards 0 yield and Fed is backstopping muni money markets.

Granted, no state tax in WA. But...

1.83% tax equivalent (or better depending on income fluctuations) for me beats any new CD I can get at Ally right now.

Same reason that I had a Muni in my tIRA account. Grabbing at falling yields. Looking to move to "High Yield" FDIC account next. Synchrony has 1.5%.