Vanguard Municipal Money Market VMSXX 1.39%

[Kevin M]

Let's take a look at a bit more history, the last three years, to get more perspective. I'll use similar marginal tax rates of 32% and 10.3% (CA).


(I've switched from using ImportHTML to a script I wrote that can pull multiple years of SEC yields from the Vanguard web site)

Observations?

Kevin

[neurosphere]

Observations?

Yes, I have one. Rates have gone up.

Some others:

-- Treasury yields are overall relatively higher now relatively to munis (even with the swings in muni bonds) over the past year compared to about two years ago
-- The swings in muni yields were greater during 2018 compared to about two years ago (which was my main point in the previous post where), HOWEVER those 2017 swings are still fairly large (larger than I remembered) and maybe even the same when described as a "percent of fluctuation" compared to the baseline at the time.
-- Perhaps there is always a relative "flattening" of muni rates around this time? Seems final quarter of 2017 is similar to now. However the 2016 "flat spot" occurred April to August.
---

[Kevin M]

-- The swings in muni yields were greater during 2018 compared to about two years ago (which was my main point in the previous post where), HOWEVER those 2017 swings are still fairly large (larger than I remembered) and maybe even the same when described as a "percent of fluctuation" compared to the baseline at the time.

My initial reaction to the last part of this was "I don't think so", but looking a little more closely it changed to "maybe". It occurred to me that changing the vertical scale to logarithmic should give us better insight into this. I did that, but cut off the months before the Muni MM yields spiked from about 0% to about 0.2-0.25% and stabilized for a bit. This allows us to expand the vertical axis to see only the interesting stuff. This chart starts on 4/16/2016:



The relative sizes of the swings in 2018 still generally look somewhat larger than in 2017, but not by as much as when looking at a linear scale. But look at that upswing into Sep 2016, and the following downswing into Dec 2016; we didn't see anything like that in 2017 or 2018.

There were relatively large upswings from 12/16 to 1/17 and 12/17 to 1/18 (although the latter was larger). Will we see anything like that from now until Jan 2019?

Kevin

[neurosphere]

-- The swings in muni yields were greater during 2018 compared to about two years ago (which was my main point in the previous post where), HOWEVER those 2017 swings are still fairly large (larger than I remembered) and maybe even the same when described as a "percent of fluctuation" compared to the baseline at the time.

My initial reaction to the last part of this was "I don't think so", but looking a little more closely it changed to "maybe". It occurred to me that changing the vertical scale to logarithmic should give us better insight into this.

Good idea on using the log scare. I was thinking more in terms of taking the absolute trough to peak difference (of each peak), divided by the average of the trough to peak. But I think using a log scale accomplishes a similar thing and is less work! I agree that maybe the more recent peaks are maybe bigger, but on average the 4 more recent peaks are "in the ballpark" of the prior ones. Would it make a difference to use absolute yields instead of TEY? It's been a long time since my engineering days, but I think not.

And it remains an interesting question, about whether we'll see another late-year upswing. I predict not, based on nothing more than gut.

[Bimmer]

Thanks for continuing to post these charts so that we can all follow and determine which MM fund to be using!!

[Kevin M]

I thought some might be interested to see history since SEC yield was first published by Vanguard on 1/4/1993. Here I show Prime MM and Muni MM SEC yield, along with Muni MM taxable-equivalent yield at a federal marginal rate of 25%. I used 25% because this was the pre-2018 grabiner rule of thumb rate at which muni funds should be competitive with taxable funds.



The immediate observation is that the muni MM rate has always been quite volatile compared to Prime MM.

Next, I zoom in on an earlier period when yields were relatively stable, so we can compare the peak and valley cycles to what we've seen more recently.



Kevin

[grabiner]

I thought some might be interested to see history since SEC yield was first published by Vanguard on 1/4/1993. Here I show Prime MM and Muni MM SEC yield, along with Muni MM taxable-equivalent yield at a federal marginal rate of 25%. I used 25% because this was the pre-2018 grabiner rule of thumb rate at which muni funds should be competitive with taxable funds.

For whatever reason, the rule of thumb doesn't seem to be right for money-market funds; the break-even tax rate is much higher than for intermediate-term bond funds. A possible reason is that investors in moderate tax brackets are unlikely to have enough in money-market funds for the tax issues to matter; it's common for an investor in the 24% bracket (old 28% bracket) to have $100K in an intermediate-term muni fund, but not common to have $100K in cash for long.

[Kevin M]

I thought some might be interested to see history since SEC yield was first published by Vanguard on 1/4/1993. Here I show Prime MM and Muni MM SEC yield, along with Muni MM taxable-equivalent yield at a federal marginal rate of 25%. I used 25% because this was the pre-2018 grabiner rule of thumb rate at which muni funds should be competitive with taxable funds.

For whatever reason, the rule of thumb doesn't seem to be right for money-market funds; the break-even tax rate is much higher than for intermediate-term bond funds. A possible reason is that investors in moderate tax brackets are unlikely to have enough in money-market funds for the tax issues to matter; it's common for an investor in the 24% bracket (old 28% bracket) to have $100K in an intermediate-term muni fund, but not common to have $100K in cash for long.

Thanks for the input. It also seems to vary over time at large frequencies, and it's hard to say what's reasonable given the extreme volatility of the muni yield at short frequencies.

Something around 35% seems somewhat reasonable for the period I zoomed in on, roughly 1996-1998, while something around 30% seems reasonable for say 2006-2008, and perhaps the last few years. For 2003 and 2004, the raw muni yield was higher than Prime MM yield for much of the time, so even at 0% tax rate the muni fund was generally higher yield. This also was true for much of the time period 2009-2011, but yields were so low it hardly mattered.

The muni yield volatility has been so high that even at whatever approximate marginal tax rate seems like a reasonable adjustment, you probably are going to earn more at that tax rate by switching between muni and Prime as the muni rate cycles up and down. For any particular period, there is likely to be a high enough marginal tax rate that will favor sticking with the muni MM fund.

Kevin

[UpperNwGuy]

We're up to 1.60% on the Municipal Money Market as of December 27. For comparison the Prime Money Market is at 2.41%. Seems to me that Prime is the better deal for most folk.

[am]

We're up to 1.60% on the Municipal Money Market as of December 27. For comparison the Prime Money Market is at 2.41%. Seems to me that Prime is the better deal for most folk.

At 32% bracket roughly 2.35 tey. Not sure its worth switching to prime?

[Kevin M]

We're up to 1.60% on the Municipal Money Market as of December 27. For comparison the Prime Money Market is at 2.41%. Seems to me that Prime is the better deal for most folk.

Muni MM had a little dip in December: it was at 1.60% as far back as 11/26, dropped to 1.57% from 12/12 through 12/20, now up to 1.61%. During that same period, Prime MM climbed from 2.29% on 11/26 to 2.41% today.

Whether or not one or the other is a better deal depends on marginal tax rates, but yeah, for most people Prime MM is a better deal.

An even better deal for me still is Treasury MM, which at 2.27% is a taxable-equivalent yield (TEY) for me of 2.55%; that's at 27% marginal and 8% state tax rates (it's mainly the latter that matters for Treasury funds).

Kevin

[GrowthSeeker]

(I've switched from using ImportHTML to a script I wrote that can pull multiple years of SEC yields from the Vanguard web site)

I assume your script works on Google Sheets?
I found a convoluted way of getting approximate SEC yields on ETFs and Funds from yahoo finance historical data using IMPORTHTML, but it doesn't work on Money Markets. I'm getting the dividend amounts as a text string such as this: "*0.721* Dividend" (without the quotes). Then I have to strip out the non numeric characters; then multiply by the number of dividends per year and divide by closing price.

Could you give a hint as to what function(s) your script uses? Thanks.
(apologies for going off topic)

[Kevin M]

(I've switched from using ImportHTML to a script I wrote that can pull multiple years of SEC yields from the Vanguard web site)

I assume your script works on Google Sheets?

Correct.

Could you give a hint as to what function(s) your script uses? Thanks.
(apologies for going off topic)

I don't mind just sharing the script code. This only works for Vanguard mutual funds. The URL is slightly different for Vanguard ETFs, but it should be fairly easy to modify for Vanguard ETFs--perhaps by adding an optional flag parameter (e.g., missing or 0 for mutual funds, 1 for ETFs). I wrote this a few years ago, and haven't done any scripting since, so, not sure I'd want to bother.

There are two functions. One is called directly from the sheet, like any other function. The other is just some script that I decided to break out into a separate function, and is called by the main function script. Since you need the second script for the first to work, I'll show that first:

Code: Select all

function getDateStringPairs(sDateStart, sDateEnd) {
  // Input parameters are start-date and end-date STRINGS.
  // Return 2-dim array of date-string pairs, formatted for concatenating to URL.
  // One formatted date-string pair for each year or partial year.
  var d1 = new Date(sDateStart);
  var d2 = new Date(sDateEnd);
  var oneDay=1000*60*60*24;
  var dDiff = (d2 - d1) / oneDay; //std year: lastDay - firstDay = 364.
  var p = Math.ceil(dDiff / 365); // 364/365 = 1 (std year); 365/365 = 1 (leap year); 366/365 = 2.
    
  var aDates = [];
  aDates.push(d1);
  aDates.push(d2);
  
  //if more than one page, fill date array with pairs of dates one year apart,
  //each date-pair starts with date one day after second date in previous pair
  if (p > 1) {
    var lastDate = aDates.pop() //pop last date off stack and store
    for (i = 0; i < p-1; i++) {
      //set new date = last date on stack, then add 365 days to it and push it on stack
      var addDate = new Date(aDates[aDates.length - 1].getTime());
      addDate.setDate(addDate.getDate() + 364);
      //if ( addDate.getTime() >= lastDate.getTime() ) break; // handle corner cases if necessary
      aDates.push(addDate);
      
      //now do same but add 1 day; this will be first date of next date-pair
      var addDate = new Date(aDates[aDates.length - 1].getTime());
      addDate.setDate(addDate.getDate() + 1);
      aDates.push(addDate);
    }
  }
  //push last date back onto stack
  aDates.push(lastDate);
  
  //pull each date pair from bottom of stack, format date strings
  //and push date pair string into array
  var aDatePairs = []; // 2-dim array to hold date pairs
  while (aDates[0] != null) {
    var aDatePair = []; // 1-dim array to hold one date pair
    for (var i = 0; i < 2; i++) { //once for each date in date pair
      var date = aDates.shift();  //pull date off bottom of stack
      var m = date.getMonth() + 1;
      var d = date.getDate();
      var y = date.getFullYear();
      aDatePair.push(m + '%2F' + d + '%2F' + y);
    } // now we have one date pair in aDatePair
    aDatePairs.push(aDatePair); // push aDatePair into next row of aDatePairs
  }
  return aDatePairs;
}

And here is the main function script:

Code: Select all

/**
 * Retrieve price and yield history for a Vanguard mutual fund.
 *
 * @param {string} fund_id ID of Vanguard fund.
 * @param {date} start_date First date for which to retrieve price and yield.
 * @param {date} end_date Last date for which to retrieve price and yield.
 * @return Vanguard fund date, price, yield as strings returned from VG web.
 * @customfunction
 */
function getVanguardPriceYield(fund_id, start_date, end_date) {
  // Works with either string or numeric fund ID, and dates as dates or strings.

  // Set default parameters for debugging.
  var fundID = (fund_id ? fund_id : "0084");
  var sStartDate = (start_date ? start_date : "12/28/1992");
  var sEndDate = (end_date ? end_date : "01/04/1993");

  // fund ID   fund name                              # of holdings
  // --------- -------------------------------------- -------------   
  // 0035/0535 Int Term Treasury (VFITX/VFIUX)              80
  // 0084/0584 TBM (VBMFX/VBTLX)                          6979
  // 5314      Int-Term Bond Index (Adm)                  1600
  // 1946      Int-Term Corp Bond Index (Adm)             1493
  // 0071/0571 Int-Term Inv-Grade (VFICX/VFIDX)           1850
  // 0028/0568 Long-Term Inv-Grade (VWESX/VWETX)           746
  // 0029/0529 High-Yield Corp (VWEHX/VWEAX)               394
  // 0100/5100 CA Int Term Tax-Exempt (VCAIX/VCADX)       1505
  // 0075/0575 CA Long-Term Tax-Exempt (VCITX/VCLAX)       592
  // 0042      Int-Term Tax-Exempt (Inv)                  4341
  // 0043      Long-Term Tax-Exempt (Inv)                 1195
  // 0044      High-Yield Tax-Exempt (Inv)                1066
  // 0041      Short-term Tax-Exempt (Inv)                1626
  // 0031/0531 Limited-Term Tax-Exempt (Inv/Adm)          2652

  // Get array of start date, end date for each year/page of data
  var aDateStringPairs = getDateStringPairs(sStartDate, sEndDate);
      
  //URL with everything except start date and end date
  var urlBase = "https://personal.vanguard.com/us/funds/tools/pricehistorysearch?radio=1&results=get&FundId=" 
  + fundID + "&radiobutton2=1";
  
  var aValues = []; // array to hold values from all pages
  // loop through Vanguard web pages of prices/yields, one page per pair of dates;
  for (var p in aDateStringPairs) {
    //add dates to URL and retrieve data
    var url = urlBase + "&beginDate=" + aDateStringPairs[p][0] + "&endDate=" + aDateStringPairs[p][1];
    var sContent = UrlFetchApp.fetch(url).getContentText();
    
    // Get data rows that look like one of the following (2nd one is for missing SEC yield prior to 1993):
    //<tr class="wr"><td align="left">01/04/2010</td><td>$11.03</td><td class="nr">1.46%</td></tr>
    //<tr class="wr"><td align="left">12/28/1992</td><td>$9.87</td><td class="nr">&#8212;</td></tr>
    var aDataTable = sContent.match(/<tr.*\d\/.*\$\d.*[%;]<\/td><\/tr>/g);
    
    // Loop through html rows, extract data values for each row into array,
    // and push into array returned by function.
    for (var i in aDataTable) {
      aValues.push(aDataTable[i].replace("&#8212;","").match(/\$?[\d]+[\d\/\.\$\%]*/g));
      Logger.log(aValues[i]);
    }
  }
  //insert prices/yields into sheet PRICE_YIELD
  return aValues;
}

Of course the more years you pull, the slower this runs, since it must fetch a URL for each year of data. If anyone finds a way to speed it up, please share.


Also of course, if Vanguard ever changes the layout of the price/history search results web page, or stops providing it, the script won't work.

I had a similar script that pulled Vanguard fund holdings, but apparently they stopped publishing those web pages. However, I found that you can download holdings to a CSV file from the advisors and/or institutional investors site, which is even better.

Kevin

[GrowthSeeker]

I don't mind just sharing the script code.

Wow, thank you, Kevin. I will check this out when I get home. You’re the best!

[UpperNwGuy]

We're up to 1.60% on the Municipal Money Market as of December 27. For comparison the Prime Money Market is at 2.41%. Seems to me that Prime is the better deal for most folk.

At 32% bracket roughly 2.35 tey. Not sure its worth switching to prime?

That's what I'm thinking, too. The gap between money market rates always seems to be greater than similar gaps on the bond side.

[Kevin M]

I received a PM saying that the Google spreadsheet I shared that uses ImportHTML to get the SEC yields was crashing. I checked, and it was working fine for me. A subsequent PM indicated that it was crashing Chrome, but not FireFox (I have been using mostly Firefox lately). I verified that it is crashing the Chrome browser for me too.

I figured out that it is the chart that is causing Chrome to crash. After deleting the chart, it doesn't crash. Of course the chart is the primary output, so that's a problem. I'll continue to investigate (e.g., reinstall Chrome, delete extensions) as I have time, but if anyone else figures out how to fix the problem in Chrome, please let us know.

I've made a few changes to the sheet, and added some notes. Here again is the link to the spreadsheet, which is shared as view only, so make a copy if you want to edit (e.g., to enter your marginal tax rates, switch out CA MM fund for you own state fund, etc.): https://docs.google.com/spreadsheets/d/ ... sp=sharing.

Here is the latest chart showing about the last year (as always, TEYs are for my expected 2019 marginal tax rates of 27% fed and 8% state):



Treasury MM continues to be the best choice for me at 2.30%, which is 2.58% TEY for me. One can do a little better with a 1-month Treasury, at about 2.4% as of Friday.

Kevin

[Leif]

I received a PM saying that the Google spreadsheet I shared that uses ImportHTML to get the SEC yields was crashing. I checked, and it was working fine for me. A subsequent PM indicated that it was crashing Chrome, but not FireFox (I have been using mostly Firefox lately). I verified that it is crashing the Chrome browser for me too.

FYI, I have a MacBook Pro (MacOS Mojave Version 10.14.2) with Safari and Chrome. I've been running the spreadsheet on Safari. I copied my URL from Safari to Chrome. It worked without crashing. Graphs displayed as expected. I'm using Chrome Version 71.0.3578.98 (Official Build) (64-bit).

[WanderingDoc]

I received a PM saying that the Google spreadsheet I shared that uses ImportHTML to get the SEC yields was crashing. I checked, and it was working fine for me. A subsequent PM indicated that it was crashing Chrome, but not FireFox (I have been using mostly Firefox lately). I verified that it is crashing the Chrome browser for me too.

I figured out that it is the chart that is causing Chrome to crash. After deleting the chart, it doesn't crash. Of course the chart is the primary output, so that's a problem. I'll continue to investigate (e.g., reinstall Chrome, delete extensions) as I have time, but if anyone else figures out how to fix the problem in Chrome, please let us know.

I've made a few changes to the sheet, and added some notes. Here again is the link to the spreadsheet, which is shared as view only, so make a copy if you want to edit (e.g., to enter your marginal tax rates, switch out CA MM fund for you own state fund, etc.): https://docs.google.com/spreadsheets/d/ ... sp=sharing.

Here is the latest chart showing about the last year (as always, TEYs are for my expected 2019 marginal tax rates of 27% fed and 8% state):



Treasury MM continues to be the best choice for me at 2.30%, which is 2.58% TEY for me. One can do a little better with a 1-month Treasury, at about 2.4% as of Friday.

Kevin

If we don't pay state taxes, then Prime MM is the best gig?

[mouth]

I'm sorry to be "greedy" but is there an easy comparison for TEY of the growth of $10,000? It's hard to really compare the impact of the yield's ups and downs without seeing the growth.

[deskjockey]

If we don't pay state taxes, then Prime MM is the best gig?

Most likely--not paying state taxes makes it easier to compare, but you still need to factor in your federal tax rate to see if the muni MM is better or not. I just quickly modeled it and, as of now, VMMXX is the best for folks in states with no income tax at any tax rate up to 35%. This could change as rates change, of course.

[Random Poster]

If we don't pay state taxes, then Prime MM is the best gig?

Most likely--not paying state taxes makes it easier to compare, but you still need to factor in your federal tax rate to see if the muni MM is better or not. I just quickly modeled it and, as of now, VMMXX is the best for folks in states with no income tax at any tax rate up to 35%. This could change as rates change, of course.

Does this calculation include the possibility of paying the 3.8% NIIT?

[deskjockey]

Does this calculation include the possibility of paying the 3.8% NIIT?

Yes, it does. If you live in a state without an income tax, only the top-most bracket really benefits from the muni MM fund with rates as they stand today (well, as they stood Friday). That can change, as the graph shows.

[RetiredArtist]

Kevin, I have read all your posts, & have learned a lot about bonds & bond funds. Thank you!
Children's author James Marshall could write a book in his Stupeds series about me- "The Stupeds Learn Investing".
My questions are tax related (so I can use your spreadsheet correctly):
Your spreadsheet shows a federal marginal tax rate of 27%. On charts I find online (CNBC, Forbes), the 2019 rates jump from 24% to 32%. Is your 27% federal rate a blend you that calculated, taking into account income above the 24% rate?
For that matter, when referring to the tax rate charts, do I use Adjusted Gross Income as "income"?

[deskjockey]

Kevin, I have read all your posts, & have learned a lot about bonds & bond funds. Thank you!
Children's author James Marshall could write a book in his Stupeds series about me- "The Stupeds Learn Investing".
My questions are tax related (so I can use your spreadsheet correctly):
Your spreadsheet shows a federal marginal tax rate of 27%. On charts I find online (CNBC, Forbes), the 2019 rates jump from 24% to 32%. Is your 27% federal rate a blend you that calculated, taking into account income above the 24% rate?
For that matter, when referring to the tax rate charts, do I use Adjusted Gross Income as "income"?

I'm not Kevin, but I can help you with a couple of questions--yes, the tax rates now go from 24% to 32%. Use whatever marginal rate applies to you. In my case, it's 24% plus the NIIT (3.8%), which brings my marginal rate to 27.8%.

For the tax rate charts, use AGI minus your deductions (standard or itemized) to figure out what your marginal rate is.

[RetiredArtist]

Thanks, Desk Jockey.

[Random Poster]

Use whatever marginal rate applies to you. In my case, it's 24% plus the NIIT (3.8%), which brings my marginal rate to 27.8%.

Does this calculation include the possibility of paying the 3.8% NIIT?

Yes, it does. If you live in a state without an income tax, only the top-most bracket really benefits from the muni MM fund with rates as they stand today (well, as they stood Friday). That can change, as the graph shows.

I must be missing something.

If I put 35.8% as the marginal federal tax rate (and 0 as the state tax rate), due to being in the 32% federal tax bracket plus being subject to the 3.8% NIIT, the yield on the Muni MM looks to be higher than the Prime MM on the graph, but the TEY for the Prime is 2.45 compared to 2.34 for the Muni.

[deskjockey]

Use whatever marginal rate applies to you. In my case, it's 24% plus the NIIT (3.8%), which brings my marginal rate to 27.8%.

Does this calculation include the possibility of paying the 3.8% NIIT?

Yes, it does. If you live in a state without an income tax, only the top-most bracket really benefits from the muni MM fund with rates as they stand today (well, as they stood Friday). That can change, as the graph shows.

I must be missing something.

If I put 35.8% as the marginal federal tax rate (and 0 as the state tax rate), due to being in the 32% federal tax bracket plus being subject to the 3.8% NIIT, the yield on the Muni MM looks to be higher than the Prime MM on the graph, but the TEY for the Prime is 2.45 compared to 2.34 for the Muni.

You need to extend the formulas for Prime MM to the end of the data series to get the graphic to display everything. As it is currently shared, the formulas only go to row 254, but they need to go to row 260 (at a minimum) or 266 (best). Once you do that, it should populate properly. Bottom line, go by the TEY on the spreadsheet.

[Random Poster]

You need to extend the formulas for Prime MM to the end of the data series to get the graphic to display everything. As it is currently shared, the formulas only go to row 254, but they need to go to row 260 (at a minimum) or 266 (best). Once you do that, it should populate properly. Bottom line, go by the TEY on the spreadsheet.

Okay. Thanks.

[Kevin M]

Your spreadsheet shows a federal marginal tax rate of 27%. On charts I find online (CNBC, Forbes), the 2019 rates jump from 24% to 32%. Is your 27% federal rate a blend you that calculated, taking into account income above the 24% rate?
For that matter, when referring to the tax rate charts, do I use Adjusted Gross Income as "income"?

The 27% marginal fed rate is due to an extra dollar of interest being taxed at 12%, plus pushing an extra dollar of qualified dividend (QD) or long-term capital gain (LTCG) income from being taxed at 0% to 15%. Thus, marginal interest income is effectively taxed at 12% + 15% = 27%.

Visualize the QD/LTCG income stacked on top of the ordinary income, with the QD income spanning the 0% and 15% QD/LTCG tax rates. Inserting a dollar of ordinary income pushes the QD/LTCG stack up, which pushes more QD/LTCG from 0% to 15% tax.

Once your ordinary income enters the 22% bracket, all QD/LTCG is being taxed at 15%, so your marginal tax rate actually decreases from 27% to 22% when you reach this point (assuming you have QD/LTCG). Interesting that you can have a lower marginal tax rate when in a higher tax bracket!

You use taxable income, not AGI, to determine marginal tax rates. Other things also can cause your marginal tax rates to be different from your tax brackets. The best way to determine marginal tax rates is to use tax software, and add or subtract taxable income to see by what percentage your tax changes.

Kevin

[Kevin M]

You need to extend the formulas for Prime MM to the end of the data series to get the graphic to display everything. As it is currently shared, the formulas only go to row 254, but they need to go to row 260 (at a minimum) or 266 (best). Once you do that, it should populate properly. Bottom line, go by the TEY on the spreadsheet.

Fixed.

Edit: The muni funds are doing their typical January dive, so muni TEYs have dropped significantly since 1/1/2019.

Kevin

[alohamike]

Kevin,

Thanks for sharing your spreadsheet. I wanted to update it with the current data as of today. Where did you get the data from? I'd be more than happy do to the update and share it back (or update the main one) as you already did all the hard work.

Mike

[Kevin M]

Kevin,

Thanks for sharing your spreadsheet. I wanted to update it with the current data as of today. Where did you get the data from? I'd be more than happy do to the update and share it back (or update the main one) as you already did all the hard work.

Mike

Assuming you are talking about this spreadsheet, https://docs.google.com/spreadsheets/d/ ... 1074987830, the data is loaded automatically. The catch is that if you set the Days to load value in cell B1 too big, it won't load the most recent data. Last time I checked, I had set it to something like 386, and it was still loading the most recent data, but now the largest value you can set it to is 378 (to get latest data, which is 3/13/2019), and that gives you data since 3/1/2018.

The safest bet is to set it to 365, as that should always work. Note that 365 + 13 = 378 (latest data availble is for the 13th day of March, and 378 gets us data from the first day of March a year ago), so it appears that the largest value that will get the latest data is 365 plus the latest day of the month for which data is available. In other words, it will give you one year of data plus how many days of data are available in the latest month. In still other words, you can get data from the first of the month one year before the current month, which now is 3/1/2018 through 3/13/2019.

I haven't tested this on the last day of the month, but that would be a good test.

As I think I've mentioned in this thread (or maybe it was another one on a similar topic), I have another version of this spreadsheet that uses a Google Sheets script that can pull multiple years of data, and I shared the script in one of the replies.

Kevin

[Kevin M]

Assuming you are talking about this spreadsheet, https://docs.google.com/spreadsheets/d/ ... 1074987830, the data is loaded automatically. The catch is that if you set the Days to load value in cell B1 too big, it won't load the most recent data.<snip> ... but now the largest value you can set it to is 378 (to get latest data, which is 3/13/2019), and that gives you data since 3/1/2018.

<snip> Note that 365 + 13 = 378 (latest data available is for the 13th day of March, and 378 gets us data from the first day of March a year ago), so it appears that the largest value that will get the latest data is 365 plus the latest day of the month for which data is available.<snip>

Based on this observation, I changed cell B1, Days to load, to this formula: =365+DAY(today())-1. If my conclusion is correct, this should usually, if not always, return the maximum days of data containing the latest available yields that can be acquired with this particular technique.

If anyone notices it not working as expected, please let me know on the day you notice it, and I'll adjust it accordingly. The main objective is to get the latest yields, and the secondary objective is to get as much data as possible, which will be a minimum of one year, and should be a maximum of one year and one month.

Kevin

[Electron]

Vanguard Federal Money Market fund may be a good alternative to Vanguard Treasury Money Market for those in high tax states. In 2018 77.79% of income was from U.S. Government Securities. It remains the Vanguard Money Market Fund with the second highest after-tax return for my case.

It's interesting looking back to 2016 and early 2018 when the SEC Yield of tax-exempt VMSXX was actually higher than Prime Money Market. The 2016 period included 9-19-16 through 10-25-16. Those periods would appear to be fairly rare events. It was nice while it lasted!

[alohamike]

Kevin,

I updated the copy I made of your spreadsheet to include Vanguard Federal Money Market Fund. If you want to include the update, I can share out mine and you can copy/paste into yours or would it be easier to request to edit yous?

Mike

[boglesmind]

Kevin, I have read all your posts, & have learned a lot about bonds & bond funds. Thank you!
Children's author James Marshall could write a book in his Stupeds series about me- "The Stupeds Learn Investing".
My questions are tax related (so I can use your spreadsheet correctly):
Your spreadsheet shows a federal marginal tax rate of 27%. On charts I find online (CNBC, Forbes), the 2019 rates jump from 24% to 32%. Is your 27% federal rate a blend you that calculated, taking into account income above the 24% rate?
For that matter, when referring to the tax rate charts, do I use Adjusted Gross Income as "income"?

I'm not Kevin, but I can help you with a couple of questions--yes, the tax rates now go from 24% to 32%. Use whatever marginal rate applies to you. In my case, it's 24% plus the NIIT (3.8%), which brings my marginal rate to 27.8%.

For the tax rate charts, use AGI minus your deductions (standard or itemized) to figure out what your marginal rate is.

Marginal tax rates can get more complicated than that for folks who have long term capital gains (LTCGs) and qualified dividends (QDI) income in addition to ordinary income (including treasury money market interest). Additional ordinary income can push one over 0% tax bracket for LTCGs & QDI. For some MFJ person at or near the top of 12% bracket of taxable income ($78,950 in 2019), their LTCGs and QDI would be taxed at 0%. If treasury MM interest pushes them over to the 22% bracket, then their effective marginal tax would be 27% (15% for the LTCGs+QDI that got pushed into the 22% tax bracket + 12 % for the treasury mm interest that pushed out the LTCGs+QDI). There is a chart posted by some one that clearly shows that the lower tax brackets are filled with ordinary income first and then comes LTCGs and QDIs which still get the preferential tax rates.

Boglesmind

[Startled Cat]

Cool spreadsheet.

I recently switched to VCTXX from VUSXX for a slight TEY increase, but now it's a dead heat per the spreadsheet:

Vanguard CA Muni Money Market 2.82%
Vanguard Muni Money Market 2.82%
Vanguard Treasury MM 2.83%

I'll probably switch back to VUSXX if the muni fund yields keep dropping. I don't think I'll ever understand the market inefficiency that leads to muni money market yields swinging around the way they do.

[Kevin M]

Kevin, I have read all your posts, & have learned a lot about bonds & bond funds. Thank you!
Children's author James Marshall could write a book in his Stupeds series about me- "The Stupeds Learn Investing".
My questions are tax related (so I can use your spreadsheet correctly):
Your spreadsheet shows a federal marginal tax rate of 27%. On charts I find online (CNBC, Forbes), the 2019 rates jump from 24% to 32%. Is your 27% federal rate a blend you that calculated, taking into account income above the 24% rate?
For that matter, when referring to the tax rate charts, do I use Adjusted Gross Income as "income"?

I'm not Kevin, but I can help you with a couple of questions--yes, the tax rates now go from 24% to 32%. Use whatever marginal rate applies to you. In my case, it's 24% plus the NIIT (3.8%), which brings my marginal rate to 27.8%.

For the tax rate charts, use AGI minus your deductions (standard or itemized) to figure out what your marginal rate is.

Marginal tax rates can get more complicated than that for folks who have long term capital gains (LTCGs) and qualified dividends (QDI) income in addition to ordinary income (including treasury money market interest). Additional ordinary income can push one over 0% tax bracket for LTCGs & QDI. For some MFJ person at or near the top of 12% bracket of taxable income ($78,950 in 2019), their LTCGs and QDI would be taxed at 0%. If treasury MM interest pushes them over to the 22% bracket, then their effective marginal tax would be 27% (15% for the LTCGs+QDI that got pushed into the 22% tax bracket + 12 % for the treasury mm interest that pushed out the LTCGs+QDI). There is a chart posted by some one that clearly shows that the lower tax brackets are filled with ordinary income first and then comes LTCGs and QDIs which still get the preferential tax rates.

Boglesmind

Correct. I explained it upthread in this post.

Kevin

[catalina355]

Kevin, I have read all your posts, & have learned a lot about bonds & bond funds. Thank you!
Children's author James Marshall could write a book in his Stupeds series about me- "The Stupeds Learn Investing".
My questions are tax related (so I can use your spreadsheet correctly):
Your spreadsheet shows a federal marginal tax rate of 27%. On charts I find online (CNBC, Forbes), the 2019 rates jump from 24% to 32%. Is your 27% federal rate a blend you that calculated, taking into account income above the 24% rate?
For that matter, when referring to the tax rate charts, do I use Adjusted Gross Income as "income"?

I'm not Kevin, but I can help you with a couple of questions--yes, the tax rates now go from 24% to 32%. Use whatever marginal rate applies to you. In my case, it's 24% plus the NIIT (3.8%), which brings my marginal rate to 27.8%.

For the tax rate charts, use AGI minus your deductions (standard or itemized) to figure out what your marginal rate is.

Marginal tax rates can get more complicated than that for folks who have long term capital gains (LTCGs) and qualified dividends (QDI) income in addition to ordinary income (including treasury money market interest). Additional ordinary income can push one over 0% tax bracket for LTCGs & QDI. For some MFJ person at or near the top of 12% bracket of taxable income ($78,950 in 2019), their LTCGs and QDI would be taxed at 0%. If treasury MM interest pushes them over to the 22% bracket, then their effective marginal tax would be 27% (15% for the LTCGs+QDI that got pushed into the 22% tax bracket + 12 % for the treasury mm interest that pushed out the LTCGs+QDI). There is a chart posted by some one that clearly shows that the lower tax brackets are filled with ordinary income first and then comes LTCGs and QDIs which still get the preferential tax rates.

Boglesmind

Why are you specifically mentioning Treasury MM as opposed to other MM funds that contribute ordinary income. I'm curious as I use Treasury MM.

[Kevin M]

Kevin,

I updated the copy I made of your spreadsheet to include Vanguard Federal Money Market Fund. If you want to include the update, I can share out mine and you can copy/paste into yours or would it be easier to request to edit yous?

Mike

Adding it should be easy enough, but why don't you share yours in the meantime, so people who are interested can use it until I get around to it.

Note that the TEY estimate for Fed MM is only an estimate for 2019, since we don't know exactly what the percentage of income from US government obligations will be. I use 78% in my TEY calculations, since that's about what it was for 2018.

Kevin

[Kevin M]

Why are you specifically mentioning Treasury MM as opposed to other MM funds that contribute ordinary income. I'm curious as I use Treasury MM.

Because Treasury MM income is 100% exempt from state taxes. For some of us, including me, it is the highest yielding MM fund on a taxable-equivalent (or after-tax) basis. That's why I include it in the spreadsheet.

Kevin

[catalina355]

Why are you specifically mentioning Treasury MM as opposed to other MM funds that contribute ordinary income. I'm curious as I use Treasury MM.

Because Treasury MM income is 100% exempt from state taxes. For some of us, including me, it is the highest yielding MM fund on a taxable-equivalent (or after-tax) basis. That's why I include it in the spreadsheet.

Kevin

Yes, that true for me as well. I was quoting Boglesmind. He seemed to imply something special about Treasury MM.

[boglesmind]

Kevin, I have read all your posts, & have learned a lot about bonds & bond funds. Thank you!
Children's author James Marshall could write a book in his Stupeds series about me- "The Stupeds Learn Investing".
My questions are tax related (so I can use your spreadsheet correctly):
Your spreadsheet shows a federal marginal tax rate of 27%. On charts I find online (CNBC, Forbes), the 2019 rates jump from 24% to 32%. Is your 27% federal rate a blend you that calculated, taking into account income above the 24% rate?
For that matter, when referring to the tax rate charts, do I use Adjusted Gross Income as "income"?

I'm not Kevin, but I can help you with a couple of questions--yes, the tax rates now go from 24% to 32%. Use whatever marginal rate applies to you. In my case, it's 24% plus the NIIT (3.8%), which brings my marginal rate to 27.8%.

For the tax rate charts, use AGI minus your deductions (standard or itemized) to figure out what your marginal rate is.

Marginal tax rates can get more complicated than that for folks who have long term capital gains (LTCGs) and qualified dividends (QDI) income in addition to ordinary income (including treasury money market interest). Additional ordinary income can push one over 0% tax bracket for LTCGs & QDI. For some MFJ person at or near the top of 12% bracket of taxable income ($78,950 in 2019), their LTCGs and QDI would be taxed at 0%. If treasury MM interest pushes them over to the 22% bracket, then their effective marginal tax would be 27% (15% for the LTCGs+QDI that got pushed into the 22% tax bracket + 12 % for the treasury mm interest that pushed out the LTCGs+QDI). There is a chart posted by some one that clearly shows that the lower tax brackets are filled with ordinary income first and then comes LTCGs and QDIs which still get the preferential tax rates.

Boglesmind

Correct. I explained it upthread in this post.

Kevin

Didn't notice it before. Thanks.
Boglesmind

[boglesmind]

Kevin, I have read all your posts, & have learned a lot about bonds & bond funds. Thank you!
Children's author James Marshall could write a book in his Stupeds series about me- "The Stupeds Learn Investing".
My questions are tax related (so I can use your spreadsheet correctly):
Your spreadsheet shows a federal marginal tax rate of 27%. On charts I find online (CNBC, Forbes), the 2019 rates jump from 24% to 32%. Is your 27% federal rate a blend you that calculated, taking into account income above the 24% rate?
For that matter, when referring to the tax rate charts, do I use Adjusted Gross Income as "income"?

I'm not Kevin, but I can help you with a couple of questions--yes, the tax rates now go from 24% to 32%. Use whatever marginal rate applies to you. In my case, it's 24% plus the NIIT (3.8%), which brings my marginal rate to 27.8%.

For the tax rate charts, use AGI minus your deductions (standard or itemized) to figure out what your marginal rate is.

Marginal tax rates can get more complicated than that for folks who have long term capital gains (LTCGs) and qualified dividends (QDI) income in addition to ordinary income (including treasury money market interest). Additional ordinary income can push one over 0% tax bracket for LTCGs & QDI. For some MFJ person at or near the top of 12% bracket of taxable income ($78,950 in 2019), their LTCGs and QDI would be taxed at 0%. If treasury MM interest pushes them over to the 22% bracket, then their effective marginal tax would be 27% (15% for the LTCGs+QDI that got pushed into the 22% tax bracket + 12 % for the treasury mm interest that pushed out the LTCGs+QDI). There is a chart posted by some one that clearly shows that the lower tax brackets are filled with ordinary income first and then comes LTCGs and QDIs which still get the preferential tax rates.

Boglesmind

Why are you specifically mentioning Treasury MM as opposed to other MM funds that contribute ordinary income. I'm curious as I use Treasury MM.

Oh, I didn't mean to pick on Treasury MM or imply it is something special. Just pointing out that it is taxed as ordinary income at the Federal level and ordinary income can have a different effective marginal rate that what one finds in tax rate tables. Kevin M did point this our earlier in the thread and I missed it.

Boglesmind.

[catalina355]

Kevin, I have read all your posts, & have learned a lot about bonds & bond funds. Thank you!
Children's author James Marshall could write a book in his Stupeds series about me- "The Stupeds Learn Investing".
My questions are tax related (so I can use your spreadsheet correctly):
Your spreadsheet shows a federal marginal tax rate of 27%. On charts I find online (CNBC, Forbes), the 2019 rates jump from 24% to 32%. Is your 27% federal rate a blend you that calculated, taking into account income above the 24% rate?
For that matter, when referring to the tax rate charts, do I use Adjusted Gross Income as "income"?

I'm not Kevin, but I can help you with a couple of questions--yes, the tax rates now go from 24% to 32%. Use whatever marginal rate applies to you. In my case, it's 24% plus the NIIT (3.8%), which brings my marginal rate to 27.8%.

For the tax rate charts, use AGI minus your deductions (standard or itemized) to figure out what your marginal rate is.

Marginal tax rates can get more complicated than that for folks who have long term capital gains (LTCGs) and qualified dividends (QDI) income in addition to ordinary income (including treasury money market interest). Additional ordinary income can push one over 0% tax bracket for LTCGs & QDI. For some MFJ person at or near the top of 12% bracket of taxable income ($78,950 in 2019), their LTCGs and QDI would be taxed at 0%. If treasury MM interest pushes them over to the 22% bracket, then their effective marginal tax would be 27% (15% for the LTCGs+QDI that got pushed into the 22% tax bracket + 12 % for the treasury mm interest that pushed out the LTCGs+QDI). There is a chart posted by some one that clearly shows that the lower tax brackets are filled with ordinary income first and then comes LTCGs and QDIs which still get the preferential tax rates.

Boglesmind

Why are you specifically mentioning Treasury MM as opposed to other MM funds that contribute ordinary income. I'm curious as I use Treasury MM.

Oh, I didn't mean to pick on Treasury MM or imply it is something special. Just pointing out that it is taxed as ordinary income at the Federal level and ordinary income can have a different effective marginal rate that what one finds in tax rate tables. Kevin M did point this our earlier in the thread and I missed it.

Boglesmind.

OK. Thank you. I have read Kevin M's posts on this topic and they were very helpful.

[gjlynch17]

Cool spreadsheet.

I recently switched to VCTXX from VUSXX for a slight TEY increase, but now it's a dead heat per the spreadsheet:

Vanguard CA Muni Money Market 2.82%
Vanguard Muni Money Market 2.82%
Vanguard Treasury MM 2.83%

I'll probably switch back to VUSXX if the muni fund yields keep dropping. I don't think I'll ever understand the market inefficiency that leads to muni money market yields swinging around the way they do.

Schwab has a good explanation of the seasonal and other variabilities in Muni Money Market yields.

https://www.schwabfunds.com/public/file/P-11075047

According to Schwab:

"Across the MMMF industry, the most prevalent investment option is the municipal variable rate demand note (Muni VRDN), which by virtue of its put feature and frequent rate reset, is designed to have a very short effective maturity—usually either 1-day or 7-days. Muni VRDNs, by design, offer price stability, a feature very attractive to MMMFs, the majority of which strive to maintain a stable NAV. Generally speaking, somewhere between 70% and 90% of all MMMF assets are invested in these securities."

The articles then explains in some detail how the Muni VRDN works and why there is significant seasonality. It also explains why the weekly liquidity rate for Muni Money Market Funds are significantly higher than Prime Money Market Funds (70%-73% for VMSXX compared to 41%-44% for VMMXX), which is likely to make the risk of VMSXX falling below 30% and imposing redemption fees and gates exceptionally low (even lower than VMMXX).

[neurosphere]

Cool spreadsheet.

I recently switched to VCTXX from VUSXX for a slight TEY increase, but now it's a dead heat per the spreadsheet:

Vanguard CA Muni Money Market 2.82%
Vanguard Muni Money Market 2.82%
Vanguard Treasury MM 2.83%

I'll probably switch back to VUSXX if the muni fund yields keep dropping. I don't think I'll ever understand the market inefficiency that leads to muni money market yields swinging around the way they do.

Schwab has a good explanation of the seasonal and other variabilities in Muni Money Market yields.

https://www.schwabfunds.com/public/file/P-11075047

VERY nice article! Thanks for sharing. I had been looking for such a concise summary or confirmation for quite a while and failed to find a good one. We have been debating/discussing the swings on this board. "We" came to the conclusion that the swings in rates must ("obviously") be due to supply and demand, but I wondered why the effect was so big and why it's not arbitraged away. I suppose because the timing of the swings is variable and hard to predict. And perhaps, there is likely a ton of arbitrage going on, which may actually be limiting how large these swings are, or influencing the timing itself.

But the article confirm the two main sources of supply/demand or liquidity forces influencing rates: 1) investor behavior, such as pulling money out of MM funds to pay taxes in March/April and 2) liquidity changes surrounding dates when a disproportionate number of notes come due or are issued.

[Kevin M]

Schwab has a good explanation of the seasonal and other variabilities in Muni Money Market yields.
https://www.schwabfunds.com/public/file/P-11075047

VERY nice article! Thanks for sharing.<snip>

Ditto!

We clearly see the Jan and Jul drops corresponding to the semi-annual interest payment dates mentioned in the article, as well as the Mar-Apr increase around income tax payment time.

Maybe the decrease from late April to early June is a reaction to the March-April increase, as HNW investors put money back into the muni MM funds, and then the bounce back up in June is re-establishing what appears to be the equilibrium point, before the July drop, then the August rebound from that.



Kevin

[Kevin M]

Assuming you are talking about this spreadsheet, https://docs.google.com/spreadsheets/d/ ... 1074987830, the data is loaded automatically. The catch is that if you set the Days to load value in cell B1 too big, it won't load the most recent data.<snip> ... but now the largest value you can set it to is 378 (to get latest data, which is 3/13/2019), and that gives you data since 3/1/2018.

<snip> Note that 365 + 13 = 378 (latest data available is for the 13th day of March, and 378 gets us data from the first day of March a year ago), so it appears that the largest value that will get the latest data is 365 plus the latest day of the month for which data is available.<snip>

Based on this observation, I changed cell B1, Days to load, to this formula: =365+DAY(today())-1. If my conclusion is correct, this should usually, if not always, return the maximum days of data containing the latest available yields that can be acquired with this particular technique.

If anyone notices it not working as expected, please let me know on the day you notice it, and I'll adjust it accordingly. The main objective is to get the latest yields, and the secondary objective is to get as much data as possible, which will be a minimum of one year, and should be a maximum of one year and one month.

Kevin

Today is last day of March (day = 31), and the spreadsheet is working fine with days to load set to 395 using the formula: Loads data from 3/1/2018 through 3/29/2019 (Friday = last close value available).

If I temporarily change days to load to 396, it loads data from 2/28/2018 through 2/27/2018 instead.

So this data point indicates that the days to load formula result in loading the maximum number of days with a single IMPORTHTML call.

Kevin

[Kevin M]

It's been about a month since we've seen an updated chart. Nothing much has changed -- the muni yields continued to drop, but have just started their next upswing.

What I found more striking as I was updating my alternate spreadsheet, in which I use scripts to retrieve the yields (instead of ImportHTML), is the view when including the Limited-Term Tax-Exempt fund and the Short-Term Treasury Index fund.

.

We see the flattening, and even slight inversion, of the yield curves for these short terms. My TEY on Treasury MM now is slightly higher than that of either of the short-term bond funds.

Kevin