SWVXX vs VUSXX

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Immafreak
Posts: 40
Joined: Wed Oct 28, 2009 12:33 pm

SWVXX vs VUSXX

Post by Immafreak » Mon Dec 02, 2019 1:20 am

I currently have funds in Schwab Value Advantage Money Fund which from the looks of it has a lot of holdings in banks.

SWVXX : http://ims.schwab.wallst.com/repository ... XFactSheet

Is Vanguard Treasury money Market Fund (VUSXX) holds Treasury stuff.

VUSXX: https://investor.vanguard.com/mutual-fu ... file/VUSXX

VUSXX 7 day SEC yield is 1.67% compared to SWVXX 1.55%

Question: Is VUSXX more secure than SWVXX? I want to have some liquidity but want something as close to safe as CDs.

Thank you,

Wes

HomeStretch
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Joined: Thu Dec 27, 2018 3:06 pm

Re: SWVXX vs VUSXX

Post by HomeStretch » Mon Dec 02, 2019 8:35 am

A money market fund (MMF) holding only US Treasuries like VUSXX is “safer” IMO than a MMF like SWVXX that holds non-Treasuries. That said, I personally would use whichever MMF has the best tax equivalent yield. Vanguard Prime MMF generally has higher 7-day SEC yields than SWVXX due to VMMXX’s lower expenses ratio.

retiringwhen
Posts: 1438
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Location: New Jersey, USA

Re: SWVXX vs VUSXX

Post by retiringwhen » Mon Dec 02, 2019 9:56 am

If you are interested in TEY comparisons, see my google sheet that provides a comprehensive view of Vanguard MM Yields on a tax-adjusted basis.

Vanguard Money Market Tax-Equivalent and After-tax Yield Analysis


For the Schwab fund, find the Vanguard fund that is most similar and you'll get an idea of the tax-adjusted yield impact. This will require you knowing something about the underlying investments in each fund though (easily found on fund providers site).

BTW, the core answer to your original question: VUSXX wins hands down when considering relative risk (almost no difference) and net yield. In fact, unless you live in a very low tax state or have a very low taxable income, VUSXX wins almost every time. At the highest federal rates, a municipal money market can possibly make sense.

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happenstance
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Location: NYC

Re: SWVXX vs VUSXX

Post by happenstance » Mon Dec 02, 2019 10:48 am

SWVXX is more similar to Vanguard's Prime Money Market (VMMXX). At Schwab, the rough equivalent to VUSXX is Schwab U.S. Treasury Money Fund (SNSXX). Note that the yields on Schwab's money market funds are lower than Vanguard's due to Schwab having higher expense ratios.

As to risk, I agree with the above posters that both are quite safe for parking cash. For me, yield drives the choice of MMF, and that actually makes the NY Municipal Money Market (SWYXX) optimal.

Topic Author
Immafreak
Posts: 40
Joined: Wed Oct 28, 2009 12:33 pm

Re: SWVXX vs VUSXX

Post by Immafreak » Mon Dec 02, 2019 10:53 am

Thanks everyone this was helpful in my decision making. cool chart too.

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