What to do? Vanguard Muni Funds Closed to New Investors

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Frank2012
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What to do? Vanguard Muni Funds Closed to New Investors

Post by Frank2012 »

Now that that VWITX and VWIUX are closed to new investors, what should I do for Muni bond exposure in a taxable account?
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tigerman3
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Re: What to do? Vanguard Muni Funds Closed to New Investors

Post by tigerman3 »

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

Post by Rainier »

When did this happen?
stan1
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Re: What to do? Vanguard Muni Funds Closed to New Investors

Post by stan1 »

Please provide a link to a source if you believe these funds are closed to new investors.
Otherwise, I think you are mistaken.
Warning: I am about 80% satisficer (accepting of good enough) and 20% maximizer
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tigerman3
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Re: What to do? Vanguard Muni Funds Closed to New Investors

Post by tigerman3 »

My Schwab account lists these as "Open to existing investors." Interestingly enough, VMLTX (Limited Term) is still listed as "open."
rkhusky
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Re: What to do? Vanguard Muni Funds Closed to New Investors

Post by rkhusky »

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
stan1
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Re: What to do? Vanguard Muni Funds Closed to New Investors

Post by stan1 »

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

The easy solution is to buy it at Vanguard.
Warning: I am about 80% satisficer (accepting of good enough) and 20% maximizer
btenny
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Re: What to do? Vanguard Muni Funds Closed to New Investors

Post by btenny »

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

Post by etarini »

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
Best of Both Worlds
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Re: What to do? Vanguard Muni Funds Closed to New Investors

Post by Best of Both Worlds »

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.
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tigerman3
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Re: What to do? Vanguard Muni Funds Closed to New Investors

Post by tigerman3 »

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

Post by Default User BR »

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


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

Post by btenny »

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
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tigerman3
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Re: What to do? Vanguard Muni Funds Closed to New Investors

Post by tigerman3 »

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
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