Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

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vectorizer
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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by vectorizer » Tue Jan 09, 2018 9:24 am

Thank you thread ... I had fallen asleep on monitoring Prime MM, would not have noticed for a while that it beats Ally online savings (where I am now). Moving back into Prime MM will make cash management easier especially as we transition from working to retirement (from saving to distribution).

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by aabcd » Sat Jan 13, 2018 11:12 pm

It’s 1.42% now

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by lack_ey » Sat Jan 13, 2018 11:16 pm

aabcd wrote:
Sat Jan 13, 2018 11:12 pm
It’s 1.42% now
For many, the municipal money market fund would be better at 1.22%. These rates jump around, though, so it may not last.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by ThePrince » Sat Jan 13, 2018 11:28 pm

Barclays savings account is presently paying 1.40%.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by lostdog » Sun Feb 11, 2018 4:16 pm

We moved our emergency and short term cash to the vanguard prime money market fund.
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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by mickeyd » Sun Feb 11, 2018 5:05 pm

Last time I checked, PMMF was 1.45% SECY. Same as Ally online savings act.
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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by zaplunken » Sun Feb 11, 2018 5:15 pm

I just checked Vanguard and Ally. The PMM is paying 1.45% (it was 1.43% a couple of days ago) and Ally Online Saving Account is paying 1.45% (it was 1.35% a couple of days ago). Even if Ally was still at 1.35% moving all the money to Vanguard isn't worth the time to get 10 bp more. I suspect the 2 will be within a bp or 2 of each other as time passes.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by stocknoob4111 » Fri Feb 23, 2018 5:17 pm

I use GS Savings which is paying 1.5%, but I see VMMXX is paying 1.5% now so thoughts are I will move some money to this so that I can move it quickly if there is a buying opportunity in equities. Question, how risky is VMMXX. How are they able to hold $1 for so long when I see their portfolio is 70% bonds and bonds are going downhill? My other bond fund VBTLX is bleeding money like it's going out of style so just a bit confused.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by onourway » Fri Feb 23, 2018 5:43 pm

stocknoob4111 wrote:
Fri Feb 23, 2018 5:17 pm
I use GS Savings which is paying 1.5%, but I see VMMXX is paying 1.5% now so thoughts are I will move some money to this so that I can move it quickly if there is a buying opportunity in equities. Question, how risky is VMMXX. How are they able to hold $1 for so long when I see their portfolio is 70% bonds and bonds are going downhill? My other bond fund VBTLX is bleeding money like it's going out of style so just a bit confused.
Money Market funds use very short term debt to maintain share price. Vanguard is very serious about maintaining that value and I trust them. Even in 2008 only one MM fund broke the buck and it was a huge deal. Vanguard's are probably managed more conservatively than that. They have a white paper if you'd like to learn more. https://www.vanguard.com/pdf/icrbmm.pdf

I hold money in VMMXX for convenience, but there should be no difference in trade settlement times between using a MM fund at Vanguard and simply pulling the funds from a bank account.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by livesoft » Fri Feb 23, 2018 5:45 pm

^There is a difference between bonds, notes, and bills. It's a little technical, but have at it. I don't think VMMXX owns any bonds nor notes, but I didn't check.
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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by Scooter57 » Fri Feb 23, 2018 11:01 pm

Prime money market has average maturity of 47 days.

Purepoint Financial and Live Oak Bank currently offer 1.60% apr savings accounts online. But the way things are going if Prime Money Market keeps rising, they bank rates are going to have to rise considerably to remain competitive.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by Geologist » Sat Feb 24, 2018 8:09 am

stocknoob4111 wrote:
Fri Feb 23, 2018 5:17 pm
I use GS Savings which is paying 1.5%, but I see VMMXX is paying 1.5% now so thoughts are I will move some money to this so that I can move it quickly if there is a buying opportunity in equities. Question, how risky is VMMXX. How are they able to hold $1 for so long when I see their portfolio is 70% bonds and bonds are going downhill? My other bond fund VBTLX is bleeding money like it's going out of style so just a bit confused.
As someone has just posted, the average maturity of VMMXX is about 47 days, so fluctuations in principal are not important. Mostly it doesn't hold bonds, but commercial paper, Treasury bills, and CD's (domestic banks and foreign banks denominated in US dollars; all with very short maturities). I'm not sure where you got the idea that the portfolio is 70% bonds. It has held some Treasury bonds (the most recent annual report doesn't list all holdings, but it did in 2015), but again these have very short time to maturity.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by lazyday » Sat Feb 24, 2018 8:52 am

stocknoob4111 wrote:
Fri Feb 23, 2018 5:17 pm
I see their portfolio is 70% bonds
If you remember where you saw this, let us know.

It might be technically true. I believe that you can call Treasury Bills and commercial paper "bonds" though it seems misleading. If some web page calls them "bonds" they might not be wrong, but I'd be careful using that website. It's better to call the Treasury Bills and paper in Vanguard's money market funds "cash" than "bonds".

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by welderwannabe » Sat Feb 24, 2018 9:06 am

stocknoob4111 wrote:
Fri Feb 23, 2018 5:17 pm
How are they able to hold $1 for so long when I see their portfolio is 70% bonds and bonds are going downhill? My other bond fund VBTLX is bleeding money like it's going out of style so just a bit confused.
Ignoring the bonds, versus notes, versus bills debate for a second.

Retail and govt MM funds are allowed to use a different type of accounting called amortized cost accounting. This is how they keep their $1 per share.
The MM funds basically buy short term debt, and they hold it to term. Therefore any bond value reductions don't actually impact them unless they are forced to sell a security before it matures. When a money market has problems is when there is a run on the fund, and they are forced to sell depressed securities before they mature. That is when losses happen. This is why the SEC increased the daily and weekly liquidity targets for money market funds, and also allows them to stop fund redemptions or charge fees for redemptions during times of stress. All of this helps ensure nothing needs to be sold at a loss.

They are now required to provide 2 values to investors on a daily basis. The first is the NAV, which stays at $1 unless something goes really wrong. The second is the actual market value, which is the value of the underlying securities marked to market value. One of the vanguard MMs actually fell below $1 from a market value standpoint a week or so ago (the NAV never varied of course, because of amortized cost accounting). It was only under $1 for a couple days...there was even a thread on here about it. However, it is all immaterial because as long as they have enough cash or securities maturing overnight to handle whatever redemptions come in that day it is all academic. As long as a MM can hold things to term they will get their full payment and no one loses money (barring major credit defaults in the underlying securities, which I am ignoring here). Vanguard is very conservative in this area so I would not be worried.
Last edited by welderwannabe on Sat Feb 24, 2018 11:40 am, edited 1 time in total.
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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by crg11 » Sat Feb 24, 2018 10:12 am

welderwannabe wrote:
Sat Feb 24, 2018 9:06 am
stocknoob4111 wrote:
Fri Feb 23, 2018 5:17 pm
How are they able to hold $1 for so long when I see their portfolio is 70% bonds and bonds are going downhill? My other bond fund VBTLX is bleeding money like it's going out of style so just a bit confused.
Ignoring the bonds, versus notes, versus bills debate for a second.

Retail and govt MM funds are allowed to use a different type of accounting called amortized cost accounting. This is how they keep their $1 per share.
The MM funds basically buy short term debt, and they hold it to term. Therefore any bond value reductions don't actually impact them unless they are forced to sell a security before it matures. When a money market has problems is when there is a run on the fund, and they are forced to sell depressed securities before they mature. That is when losses happen. This is why the SEC increased the daily and weekly liquidity targets for money market funds, and also allows them to stop fund redemptions or charge fees for redemptions during times of stress. All of this helps ensure nothing needs to be sold at a loss.

They are now required to provide 2 values to investors on a daily basis. The first is the NAV, which stays at $1 unless something goes really wrong. The second is the actual market value, which is the value of the underlying securities marked to market value. One of the vanguard MMs actually fell below $1 from a market value standpoint a week or so ago (the NAV never varied of course, because of amortized cost accounting). It was only under $1 for a couple days...there was even a thread on here about it. However, it is all immaterial because as long as they have enough cash or securities maturing overnight to handle whatever redemptions come in that day, so it is all academic. As long as a MM can hold things to term they will get their full payment and no one loses money (barring major credit defaults in the underlying securities, which I am ignoring here). Vanguard is very conservative in this area so I would not be worried.
Thanks for the great explanation, that helped me understand MM funds more :)

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by Kevin M » Sat Feb 24, 2018 2:06 pm

You can see the holdings here. Top five holdings range in maturity from 3/16/18 to 7/12/18. Top holding is FHLB discount notes maturing 3/16, and the next five top holdings are T-bills.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by mickeyd » Sat Feb 24, 2018 4:28 pm

PMMF now giving out 1.49% yield.
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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by BogleMelon » Sun Apr 29, 2018 9:02 am

1.81% Now Vs Ally 1.50%
I am wondering myself if it worth it to pull the trigger and move my ~$30K from Ally to VMMXX
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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by LadyGeek » Sun Apr 29, 2018 9:11 am

Consider the purpose of VMMXX (investing) vs. a bank account (FDIC insured, funds are quickly available).

Also, Capital One is now at 1.60%. See: Capital One now at 1.60 [Money Market Rate To 1.60% APY]
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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by BogleMelon » Sun Apr 29, 2018 10:14 am

LadyGeek wrote:
Sun Apr 29, 2018 9:11 am
Consider the purpose of VMMXX (investing) vs. a bank account (FDIC insured, funds are quickly available).

Also, Capital One is now at 1.60%. See: Capital One now at 1.60 [Money Market Rate To 1.60% APY]
Isn't VMMXX fund are quickly available as well? And for the FDIC insurance, does it make that banks more safe? I mean, really is there a chance I lose money in MMF?
I know it happened before to break the buck for some MM funds, but how it ended? did the gov bailed out the investors, or they locked some loses forever? Also could it happen to a company like Vanguard?
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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by gmaynardkrebs » Sun Apr 29, 2018 10:32 am

BogleMelon wrote:
Sun Apr 29, 2018 10:14 am
LadyGeek wrote:
Sun Apr 29, 2018 9:11 am
Consider the purpose of VMMXX (investing) vs. a bank account (FDIC insured, funds are quickly available).

Also, Capital One is now at 1.60%. See: Capital One now at 1.60 [Money Market Rate To 1.60% APY]
Isn't VMMXX fund are quickly available as well? And for the FDIC insurance, does it make that banks more safe? I mean, really is there a chance I lose money in MMF?
I know it happened before to break the buck for some MM funds, but how it ended? did the gov bailed out the investors, or they locked some loses forever? Also could it happen to a company like Vanguard?
The investors in Reserve fund were not bailed out as I recall, but they ultimately received 99 cents of every $1 in the fund. I have no worries about Prime. Reserve's managers, the Bent father and son, were into Lehmann paper to raise their rates, and their sloppiness cost them their reputations. Vanguard is quite unlike them in every way.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by am » Sun Apr 29, 2018 10:52 am

BogleMelon wrote:
Sun Apr 29, 2018 9:02 am
1.81% Now Vs Ally 1.50%
I am wondering myself if it worth it to pull the trigger and move my ~$30K from Ally to VMMXX
For 90 bucks difference before taxes a year-not for me,

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by LadyGeek » Sun Apr 29, 2018 10:53 am

BogleMelon wrote:
Sun Apr 29, 2018 10:14 am
Isn't VMMXX fund are quickly available as well? And for the FDIC insurance, does it make that banks more safe? I mean, really is there a chance I lose money in MMF?
I was looking at this from an emotional perspective. While you may be able to do transactions like a bank, a Money market fund is not a bank.

As for something bad happening to Vanguard, see the wiki: Vanguard safety

I searched the prospectus for a fund custodian, but could not find one. Vanguard Prime Money Market Fund (VMMXX) (click on "View prospectus and reports"). Ownership appears to be The Vanguard Group, but I could be wrong.

The "Distributions" tab shows how the yield changed over the past several months. Note the 2 definitions of yield. I believe you also need to subtract the expense ratio.
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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by sport » Sun Apr 29, 2018 10:57 am

LadyGeek wrote:
Sun Apr 29, 2018 10:53 am
I believe you also need to subtract the expense ratio.
The yield of Vanguard Money Market funds is always reported net of expenses.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by drk » Sun Apr 29, 2018 11:03 am

sport wrote:
Sun Apr 29, 2018 10:57 am
The yield of Vanguard Money Market funds is always reported net of expenses.
A small nit: that's true of the SEC yield for all funds.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by Kevin M » Sun Apr 29, 2018 1:05 pm

LadyGeek wrote:
Sun Apr 29, 2018 9:11 am
Consider the purpose of VMMXX (investing) vs. a bank account (FDIC insured, funds are quickly available).
I think even John Bogle would not consider the purpose of a money market fund to be investing, but rather savings. Vanguard classifies MM funds as short-term reserves, as opposed to bonds (and of course stocks).

MM fund availability is the same as a bank, except for withdrawing small amounts of cash. I'm talking mainly about online banks, since they are the type I mainly use. You can transfer from a MM fund in one or two business days, just like a bank. I've transfered from Ally Bank and from Vanguard CA muni MM fund to my Fidelity CMA to pay for bond purchases at Fidelity, and they both work the same.

So I'd lump MM funds in with savings account as short-term reserves. It's true the an MM fund is not FDIC insured, but I consider Vanguard's MM funds to be so safe that I can ignore the difference in the current economic climate. If we started getting into more of a 2008 scenario, I'd reconsider, although no one lost money in any VG MM funds in 2008 (or ever).

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by Kevin M » Sun Apr 29, 2018 1:07 pm

sport wrote:
Sun Apr 29, 2018 10:57 am
LadyGeek wrote:
Sun Apr 29, 2018 10:53 am
I believe you also need to subtract the expense ratio.
The yield of Vanguard Money Market funds is always reported net of expenses.
Yes, true for both SEC yield and distribution yield. The latter represents the most recent actual distribution to shareholders, so by definition, must be net of expense ratio.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by sport » Sun Apr 29, 2018 1:25 pm

If you are willing to write a paper check (gasp) you can write checks directly against a Vanguard Money Market fund. The only restriction, other than available funds, is the $250 minimum.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by BogleMelon » Sun Apr 29, 2018 1:37 pm

sport wrote:
Sun Apr 29, 2018 1:25 pm
If you are willing to write a paper check (gasp) you can write checks directly against a Vanguard Money Market fund. The only restriction, other than available funds, is the $250 minimum.
That is good to know!
Should I request a checkbook or it comes automatically once I send the money to the fund? and is it (the checkbook) free?
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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by sport » Sun Apr 29, 2018 2:36 pm

BogleMelon wrote:
Sun Apr 29, 2018 1:37 pm
sport wrote:
Sun Apr 29, 2018 1:25 pm
If you are willing to write a paper check (gasp) you can write checks directly against a Vanguard Money Market fund. The only restriction, other than available funds, is the $250 minimum.
That is good to know!
Should I request a checkbook or it comes automatically once I send the money to the fund? and is it (the checkbook) free?
The checkbook is free, but you have to request it. Make sure the check writing option is selected.

Since Vanguard is not a bank, they are not actually checks, but drafts. However, that makes no significant difference. They act just like checks to the writer and the payee.

Personally, I would only use this service for QCDs. Otherwise, I just tell Vanguard to ACH the money to my regular checking account at my bank. It arrives in a day or two.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by gmaynardkrebs » Sun Apr 29, 2018 4:20 pm

Kevin M wrote:
Sun Apr 29, 2018 1:05 pm
LadyGeek wrote:
Sun Apr 29, 2018 9:11 am
Consider the purpose of VMMXX (investing) vs. a bank account (FDIC insured, funds are quickly available).
I think even John Bogle would not consider the purpose of a money market fund to be investing, but rather savings. Vanguard classifies MM funds as short-term reserves, as opposed to bonds (and of course stocks).

MM fund availability is the same as a bank, except for withdrawing small amounts of cash. I'm talking mainly about online banks, since they are the type I mainly use. You can transfer from a MM fund in one or two business days, just like a bank. I've transfered from Ally Bank and from Vanguard CA muni MM fund to my Fidelity CMA to pay for bond purchases at Fidelity, and they both work the same.

So I'd lump MM funds in with savings account as short-term reserves. It's true the an MM fund is not FDIC insured, but I consider Vanguard's MM funds to be so safe that I can ignore the difference in the current economic climate. If we started getting into more of a 2008 scenario, I'd reconsider, although no one lost money in any VG MM funds in 2008 (or ever).

Kevin
Kevin, wouldn't you say the flexibility to break the buck has actually made MM funds less vulnerable to runs than in 2008. Even Bent's Reserve Prime returned 99 cents on the dollar, and that's probably a worst case. It became a big deal only because MM funds were expected never to deviate from $1.00

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by lukestuckenhymer » Tue Jun 19, 2018 11:29 am

VMMXX just broke 2.00%

How many MMs can beat this yield?

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by centrifuge41 » Wed Jun 20, 2018 7:41 pm

Nice! Rate going up quickly.
Quick snapshot today:
CIT: 1.85%
Marcus by Goldman Sachs: 1.7%
Discover savings: 1.65%
Ally: 1.65%
Amex Savings: 1.65%
Barclays Savings: 1.65%
Capital One Money Market: 1.6%

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by CWRadio » Wed Jun 20, 2018 7:45 pm

lukestuckenhymer wrote:
Tue Jun 19, 2018 11:29 am
VMMXX just broke 2.00%

How many MMs can beat this yield?
For accounts at Fidelity:
FZDXX is 1.93%


Paul

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by zaplunken » Wed Jun 20, 2018 7:51 pm

Does the yield on the PMM fund ever go down? Yields in Treasury bills, notes and bonds have dropped yet the PMM yield is going up during that same time frame.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by raixx017 » Wed Jun 20, 2018 7:55 pm

How often does VMMXX pay interest / dividend (i.e it gets deposited to the account) ? Is that a fixed scheduled ? Where can I find this information ?

Thanks !

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by LadyGeek » Wed Jun 20, 2018 8:13 pm

You can find it on Vanguard's site: VMMXX - Vanguard Prime Money Market Fund | Vanguard (Distributions)

The fund's report explains this more clearly. From page 29 of the semi-annual report: Vanguard - Reports
Notes to Financial Statements

3. Distributions: Distributions from net investment income are declared daily and paid on the first business day of the following month.
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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by peterinjapan » Wed Jun 20, 2018 9:53 pm

Popular Direct has a 2.0% online savings account, FDIC insured. I'm loving it.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by learninginvestor » Wed Jun 20, 2018 10:08 pm

Regarding the earlier question about the Custodian for VMMXX, this information is found in the Statement of Additional Information and not in the Statutory Prospectus. The custodian for both VMMXX and VMFXX is Bank of New York Mellon.

From the SAI:
Custodian. Bank of New York Mellon, 225 Liberty Street, New York, NY 10286, serves as the Funds‘ custodian. The custodian is responsible for maintaining the Funds‘ assets, keeping all necessary accounts and records of Fund assets, and appointing any foreign subcustodians or foreign securities depositories.

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by zaplunken » Thu Jun 21, 2018 6:18 am

zaplunken wrote:
Wed Jun 20, 2018 7:51 pm
Does the yield on the PMM fund ever go down? Yields in Treasury bills, notes and bonds have dropped yet the PMM yield is going up during that same time frame.
Does anyone know the answer?

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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by rkhusky » Thu Jun 21, 2018 7:27 am

zaplunken wrote:
Thu Jun 21, 2018 6:18 am
zaplunken wrote:
Wed Jun 20, 2018 7:51 pm
Does the yield on the PMM fund ever go down? Yields in Treasury bills, notes and bonds have dropped yet the PMM yield is going up during that same time frame.
Does anyone know the answer?
Yes, the yield can go down.

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zaplunken
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Re: Vanguard Prime Money Market Fund (VMMXX) breaks 1.00 (% not $)

Post by zaplunken » Thu Jun 21, 2018 3:33 pm

rkhusky wrote:
Thu Jun 21, 2018 7:27 am
zaplunken wrote:
Thu Jun 21, 2018 6:18 am
zaplunken wrote:
Wed Jun 20, 2018 7:51 pm
Does the yield on the PMM fund ever go down? Yields in Treasury bills, notes and bonds have dropped yet the PMM yield is going up during that same time frame.
Does anyone know the answer?
Yes, the yield can go down.
Thank you.

sabtastic
Posts: 37
Joined: Tue Dec 03, 2013 1:00 am

VMMXX at 2% [Vanguard Prime Money Market Fund]

Post by sabtastic » Tue Jun 26, 2018 8:25 am

[Thread merged into here, see below (next Page). --admin LadyGeek]

Just wanted to share my happiness that we have a profitable place to park cash again! Even though online banks are insured, I never felt comfortable dealing with them, and it was a pain to have yet another waiting period before transactions completed.

Where has everyone been placing cash for the last few years?

Riley15
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Re: VMMXX at 2%

Post by Riley15 » Tue Jun 26, 2018 8:49 am

sabtastic wrote:
Tue Jun 26, 2018 8:25 am
Just wanted to share my happiness that we have a profitable place to park cash again! Even though online banks are insured, I never felt comfortable dealing with them, and it was a pain to have yet another waiting period before transactions completed.

Where has everyone been placing cash for the last few years?
By profitable do you mean the 2% yield that you have to pay federal and state taxes on while the latest inflation figures are running 2.6%.

kaeltor
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Re: VMMXX at 2%

Post by kaeltor » Tue Jun 26, 2018 10:04 am

2% is profitable? If it was ~3% then I might agree.

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TheTimeLord
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Re: VMMXX at 2%

Post by TheTimeLord » Tue Jun 26, 2018 11:05 am

kaeltor wrote:
Tue Jun 26, 2018 10:04 am
2% is profitable? If it was ~3% then I might agree.
What investments do you currently see as profitable?
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

H-Town
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Re: VMMXX at 2%

Post by H-Town » Tue Jun 26, 2018 11:13 am

Riley15 wrote:
Tue Jun 26, 2018 8:49 am
sabtastic wrote:
Tue Jun 26, 2018 8:25 am
Just wanted to share my happiness that we have a profitable place to park cash again! Even though online banks are insured, I never felt comfortable dealing with them, and it was a pain to have yet another waiting period before transactions completed.

Where has everyone been placing cash for the last few years?
By profitable do you mean the 2% yield that you have to pay federal and state taxes on while the latest inflation figures are running 2.6%.
It's rising fast. 2.8% as I saw it on BLS website.

https://www.bls.gov/cpi/

kaeltor
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Re: VMMXX at 2%

Post by kaeltor » Tue Jun 26, 2018 11:45 am

TheTimeLord wrote:
Tue Jun 26, 2018 11:05 am
kaeltor wrote:
Tue Jun 26, 2018 10:04 am
2% is profitable? If it was ~3% then I might agree.
What investments do you currently see as profitable?
whatever beats inflation, at least in my limited investment experience.

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TheTimeLord
Posts: 5284
Joined: Fri Jul 26, 2013 2:05 pm

Re: VMMXX at 2%

Post by TheTimeLord » Tue Jun 26, 2018 12:09 pm

kaeltor wrote:
Tue Jun 26, 2018 11:45 am
TheTimeLord wrote:
Tue Jun 26, 2018 11:05 am
kaeltor wrote:
Tue Jun 26, 2018 10:04 am
2% is profitable? If it was ~3% then I might agree.
What investments do you currently see as profitable?
whatever beats inflation, at least in my limited investment experience.
Does it have to be guaranteed to beat inflation, or likely to and if so how likely? Isn't the most profitable item the one with the greatest return? What if none of them out perform inflation, would you not prefer a 2% increase to a 5% loss? Since you seem to be suggesting putting money in VMMXX isn't a good idea, where should people be putting it?
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

kaeltor
Posts: 83
Joined: Sat May 12, 2018 11:20 am

Re: VMMXX at 2%

Post by kaeltor » Tue Jun 26, 2018 12:13 pm

TheTimeLord wrote:
Tue Jun 26, 2018 12:09 pm
kaeltor wrote:
Tue Jun 26, 2018 11:45 am
TheTimeLord wrote:
Tue Jun 26, 2018 11:05 am
kaeltor wrote:
Tue Jun 26, 2018 10:04 am
2% is profitable? If it was ~3% then I might agree.
What investments do you currently see as profitable?
whatever beats inflation, at least in my limited investment experience.
Does it have to be guaranteed to beat inflation, or likely to and if so how likely? Isn't the most profitable item the one with the greatest return? What if none of them out perform inflation, would you not prefer a 2% increase to a 5% loss? Since you seem to be suggesting putting money in VMMXX isn't a good idea, where should people be putting it?
"Since you seem to be suggesting putting money in VMMXX isn't a good idea, where should people be putting it?"

I am not suggesting that at all. I am just pointing out that 2% isn't exactly "profitable" given that inflation is higher than that, and I'd personally only use an investment vehicle like that for EF or something.

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