Vanguard Municipal Money Market VMSXX [0.03%]

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anon_investor
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by anon_investor »

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

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

1.83% tax equivalent (or better depending on income fluctuations) for me beats any new CD I can get at Ally right now.
The daily yield of VMSXX has dropped below 1%. I believe reading in the other thread that the yield is about 0.7%.
How can you look up the daily yield? The only yield I can find is what is listed next to the daily price (in the price history search), which is 1.25% for 4/09/2020.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Vanguard Fan 1367 »

anon_investor wrote: Sun Apr 12, 2020 2:03 pm
indexfundfan wrote: Sun Apr 12, 2020 11:23 am
watchnerd wrote: Sun Apr 12, 2020 11:10 am Swapping Treasury MM (VUSXX) for Muni MM (VMSXX) now that T-bills are going towards 0 yield and Fed is backstopping muni money markets.

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

1.83% tax equivalent (or better depending on income fluctuations) for me beats any new CD I can get at Ally right now.
The daily yield of VMSXX has dropped below 1%. I believe reading in the other thread that the yield is about 0.7%.
How can you look up the daily yield? The only yield I can find is what is listed next to the daily price (in the price history search), which is 1.25% for 4/09/2020.
Good question. All I can find is the 1.25% figure as well on the Vanguard Site. So I changed my money market funds over to VMSXX. When it goes to zero I will have to change again and as others have said, it is a few clicks.
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anon_investor
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by anon_investor »

Vanguard Fan 1367 wrote: Sun Apr 12, 2020 2:27 pm
anon_investor wrote: Sun Apr 12, 2020 2:03 pm
indexfundfan wrote: Sun Apr 12, 2020 11:23 am
watchnerd wrote: Sun Apr 12, 2020 11:10 am Swapping Treasury MM (VUSXX) for Muni MM (VMSXX) now that T-bills are going towards 0 yield and Fed is backstopping muni money markets.

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

1.83% tax equivalent (or better depending on income fluctuations) for me beats any new CD I can get at Ally right now.
The daily yield of VMSXX has dropped below 1%. I believe reading in the other thread that the yield is about 0.7%.
How can you look up the daily yield? The only yield I can find is what is listed next to the daily price (in the price history search), which is 1.25% for 4/09/2020.
Good question. All I can find is the 1.25% figure as well on the Vanguard Site. So I changed my money market funds over to VMSXX. When it goes to zero I will have to change again and as others have said, it is a few clicks.
VMSXX still beats VMMXX or VMFXX right now.
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watchnerd
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by watchnerd »

anon_investor wrote: Sun Apr 12, 2020 2:33 pm
Vanguard Fan 1367 wrote: Sun Apr 12, 2020 2:27 pm
anon_investor wrote: Sun Apr 12, 2020 2:03 pm
indexfundfan wrote: Sun Apr 12, 2020 11:23 am
watchnerd wrote: Sun Apr 12, 2020 11:10 am Swapping Treasury MM (VUSXX) for Muni MM (VMSXX) now that T-bills are going towards 0 yield and Fed is backstopping muni money markets.

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

1.83% tax equivalent (or better depending on income fluctuations) for me beats any new CD I can get at Ally right now.
The daily yield of VMSXX has dropped below 1%. I believe reading in the other thread that the yield is about 0.7%.
How can you look up the daily yield? The only yield I can find is what is listed next to the daily price (in the price history search), which is 1.25% for 4/09/2020.
Good question. All I can find is the 1.25% figure as well on the Vanguard Site. So I changed my money market funds over to VMSXX. When it goes to zero I will have to change again and as others have said, it is a few clicks.
VMSXX still beats VMMXX or VMFXX right now.
Beating the Fed money market fund isn't surprising.

Beating the Prime money market fund is surprising.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Kevin M »

watchnerd wrote: Sun Apr 12, 2020 11:32 am
indexfundfan wrote: Sun Apr 12, 2020 11:23 am
watchnerd wrote: Sun Apr 12, 2020 11:10 am Swapping Treasury MM (VUSXX) for Muni MM (VMSXX) now that T-bills are going towards 0 yield and Fed is backstopping muni money markets.

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

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

But, yes, we'll see how long it takes to show up at the 7 day yield level.
Yes, someone else posted daily yield at about 0.7% in the other thread. Seems about right, since the Fidelity national muni fund, FTEXX, daily yield dropped to 0.56% on 4/9 from 1.14% on 4/8.

A big drop will take 7 days to be reflected in the 7-day yield, since that's when it will be dropped from the average. In the meantime, the 7-day yield will decline steeply toward that daily yield, which we can see from the various charts posted in this thread and the other thread.

But remember that what matters is daily yield, since that's what you're actually earning. It would be nice if Vanguard posted 1-day yield like Fidelity does, so when yields change rapidly we could see what we're actually earning in the fund.

Kevin
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Electron
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Electron »

Here is an updated chart showing the SEC yield for Vanguard Municipal Money Market and Vanguard California Money Market.

This has been quite a round trip!

Image
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by neurosphere »

Electron wrote: Mon Apr 27, 2020 1:51 pm Here is an updated chart showing the SEC yield for Vanguard Municipal Money Market and Vanguard California Money Market.

This has been quite a round trip!

Image
Any updates? :mrgreen:

Sorry for the lame joke. But I was remembering so many interesting discussions about money market rates over the past 5 years or so. I miss those discussions. :(
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Electron »

neurosphere wrote: Mon Apr 26, 2021 9:20 am Any updates? :mrgreen:

Sorry for the lame joke. But I was remembering so many interesting discussions about money market rates over the past 5 years or so. I miss those discussions. :(
Here is an updated chart. The SEC yield on all remaining Vanguard Money Market funds is 0.01%.

One surprise was that the Treasury Money Market fund was the last of the group to drop from 0.02% to 0.01%. That may have been the result of holding a number of Treasury Floating Rate Notes with attractive rates for a period of time.

Personally, I hope the Fed increases short term rates earlier than what has been discussed.

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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by gmaynardkrebs »

Electron wrote: Mon Apr 26, 2021 1:57 pm Personally, I hope the Fed increases short term rates earlier than what has been discussed.
As an old geezer looking for a decant safe return, I share that wish in its entirety, but the auspices are unfavorable at the moment.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by neurosphere »

Electron wrote: Mon Apr 26, 2021 1:57 pm Here is an updated chart. The SEC yield on all remaining Vanguard Money Market funds is 0.01%.
Thanks for the graph. Rates went to zero? Who knew?! I trust you understand I'm being playful. :happy

The updated chart you posted is a good reference or a useful visual for how quickly things can change. Both "overall" things like rates going to zero and staying there, but also normal/expected short term volatility (e.g. quarterly fluctuations in muni rates) as well as unexpected changes such as the liquidity shocks as seen last spring.
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by retiringwhen »

On a slightly serious note, those graphs represent a key piece of evidence about why the money market industry is in a state of literal dismantling.

Since last year, almost all of the money market funds I normally used have disappeared except VUSXX and VMFXX of course.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Electron »

Surprising to see three of the Vanguard Municipal Money Market funds pay out capital gains for 2021! I don't recall seeing that before.

I assume that the short term capital gains are taxed as ordinary income.

It looks like money market yields will finally start moving up in 2022.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by UpperNwGuy »

retiringwhen wrote: Mon Apr 26, 2021 2:15 pm On a slightly serious note, those graphs represent a key piece of evidence about why the money market industry is in a state of literal dismantling.

Since last year, almost all of the money market funds I normally used have disappeared except VUSXX and VMFXX of course.
I pulled my savings out of three Vanguard money market funds in March 2020, and I'm sure many others did the same.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Makefile »

UpperNwGuy wrote: Sun Jan 02, 2022 2:35 pm
retiringwhen wrote: Mon Apr 26, 2021 2:15 pm On a slightly serious note, those graphs represent a key piece of evidence about why the money market industry is in a state of literal dismantling.

Since last year, almost all of the money market funds I normally used have disappeared except VUSXX and VMFXX of course.
I pulled my savings out of three Vanguard money market funds in March 2020, and I'm sure many others did the same.
I wonder if, in long term history, money market funds will just be a footnote and quirk of 1970s era US bank regulations (when banks' interest rates were capped below market rate).

Certainly they would have had a hard time catching on if they had only existed 2008-onward.

I read that in Europe they were never a big thing anyway. And that in the US, they are an impediment to implementing negative nominal short-term rates should the Fed want (need?) to go in that direction in the next economic hiccup.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by anon_investor »

UpperNwGuy wrote: Sun Jan 02, 2022 2:35 pm
retiringwhen wrote: Mon Apr 26, 2021 2:15 pm On a slightly serious note, those graphs represent a key piece of evidence about why the money market industry is in a state of literal dismantling.

Since last year, almost all of the money market funds I normally used have disappeared except VUSXX and VMFXX of course.
I pulled my savings out of three Vanguard money market funds in March 2020, and I'm sure many others did the same.
Yep, some of my "cash" went into I Bonds. I moved some into no penalty CDs, which went into I Bonds in 2021.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Electron »

The SEC yield on two Vanguard Money Market funds is already starting to rise ahead of the Federal Reserve.

VMSXX is showing a 7 day SEC yield of 0.03% while VUSXX is at 0.06%.

It's interesting that the Treasury Money Market fund showed an increase first. The January dividend was nearly twice that of the December dividend.

It will feel better to receive at least some level of meaningful income from these funds. It's been a long wait!
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by gmaynardkrebs »

Electron wrote: Tue Feb 15, 2022 1:36 pm The SEC yield on two Vanguard Money Market funds is already starting to rise ahead of the Federal Reserve.

VMSXX is showing a 7 day SEC yield of 0.03% while VUSXX is at 0.06%.

It's interesting that the Treasury Money Market fund showed an increase first. The January dividend was nearly twice that of the December dividend.

It will feel better to receive at least some level of meaningful income from these funds. It's been a long wait!
Me too, but thanks to my native indolence, I've lost over 7% in real purchasing power over the last year while "waiting" for the rates to go up.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by anon_investor »

Electron wrote: Tue Feb 15, 2022 1:36 pm The SEC yield on two Vanguard Money Market funds is already starting to rise ahead of the Federal Reserve.

VMSXX is showing a 7 day SEC yield of 0.03% while VUSXX is at 0.06%.

It's interesting that the Treasury Money Market fund showed an increase first. The January dividend was nearly twice that of the December dividend.

It will feel better to receive at least some level of meaningful income from these funds. It's been a long wait!
Why not move it to FDIC insured online savings accounts that all pay around 0.50% APY?
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Groundhog »

The most recent 6 month Treasury bill rate is 0.77%.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by gmaynardkrebs »

Groundhog wrote: Tue Feb 15, 2022 2:19 pm The most recent 6 month Treasury bill rate is 0.77%.
Question, isn't that still a pretty negative real rate assuming inflation stays at 5%-7% YOY for a while? I was thinking short TIPS would still be better?
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Groundhog »

gmaynardkrebs wrote: Tue Feb 15, 2022 2:33 pm
Groundhog wrote: Tue Feb 15, 2022 2:19 pm The most recent 6 month Treasury bill rate is 0.77%.
Question, isn't that still a pretty negative real rate assuming inflation stays at 5%-7% YOY for a while? I was thinking short TIPS would still be better?
True, I was just comparing it to current money market rates.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Stinky »

Electron wrote: Tue Feb 15, 2022 1:36 pm The SEC yield on two Vanguard Money Market funds is already starting to rise ahead of the Federal Reserve.

VMSXX is showing a 7 day SEC yield of 0.03% while VUSXX is at 0.06%.

It's interesting that the Treasury Money Market fund showed an increase first. The January dividend was nearly twice that of the December dividend.

It will feel better to receive at least some level of meaningful income from these funds. It's been a long wait!
Your $10,000 in VMSXX will earn $3 for the year, while the same amount in VUSXX will earn $6.

Not even a decent meal at McDonald’s…..
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by gmaynardkrebs »

Stinky wrote: Tue Feb 15, 2022 3:45 pm
Electron wrote: Tue Feb 15, 2022 1:36 pm The SEC yield on two Vanguard Money Market funds is already starting to rise ahead of the Federal Reserve.

VMSXX is showing a 7 day SEC yield of 0.03% while VUSXX is at 0.06%.

It's interesting that the Treasury Money Market fund showed an increase first. The January dividend was nearly twice that of the December dividend.

It will feel better to receive at least some level of meaningful income from these funds. It's been a long wait!
Your $10,000 in VMSXX will earn $3 for the year, while the same amount in VUSXX will earn $6.

Not even a decent meal at McDonald’s…..
Yeah, especially since McDonald’s just announced they’re raising their prices.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by anon_investor »

Stinky wrote: Tue Feb 15, 2022 3:45 pm
Electron wrote: Tue Feb 15, 2022 1:36 pm The SEC yield on two Vanguard Money Market funds is already starting to rise ahead of the Federal Reserve.

VMSXX is showing a 7 day SEC yield of 0.03% while VUSXX is at 0.06%.

It's interesting that the Treasury Money Market fund showed an increase first. The January dividend was nearly twice that of the December dividend.

It will feel better to receive at least some level of meaningful income from these funds. It's been a long wait!
Your $10,000 in VMSXX will earn $3 for the year, while the same amount in VUSXX will earn $6.

Not even a decent meal at McDonald’s…..
O.5% APY in an FDIC insured HYSA would have been better...
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Electron »

Stinky wrote: Tue Feb 15, 2022 3:45 pm Your $10,000 in VMSXX will earn $3 for the year, while the same amount in VUSXX will earn $6.
The Federal Reserve is expected to raise the Federal Funds rate in steps over the next year or longer. The SEC yield provided by Money Market funds would follow and rise from the current low levels.

Unfortunately, those yields will likely be much less than the inflation rate.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Kevin M »

gmaynardkrebs wrote: Tue Feb 15, 2022 2:05 pm
Electron wrote: Tue Feb 15, 2022 1:36 pm The SEC yield on two Vanguard Money Market funds is already starting to rise ahead of the Federal Reserve.

VMSXX is showing a 7 day SEC yield of 0.03% while VUSXX is at 0.06%.

It's interesting that the Treasury Money Market fund showed an increase first. The January dividend was nearly twice that of the December dividend.

It will feel better to receive at least some level of meaningful income from these funds. It's been a long wait!
Me too, but thanks to my native indolence, I've lost over 7% in real purchasing power over the last year while "waiting" for the rates to go up.
And what would your fixed-income alternative have been? Total Bond (VBMFX) has a total 1-year nominal return of -4.08%, so real about -11%. Cash at 0% to 0.5% has done better in real terms.

If you were comfortable buying short-term TIPS at negative real yields a year ago, you would have done better, but still lost money in real terms. 1-year return of VG short-term TIPS fund (VTAPX) is 3.63%, so about -3.5% real.

Kevin
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by anon_investor »

Kevin M wrote: Thu Feb 17, 2022 6:23 pm
gmaynardkrebs wrote: Tue Feb 15, 2022 2:05 pm
Electron wrote: Tue Feb 15, 2022 1:36 pm The SEC yield on two Vanguard Money Market funds is already starting to rise ahead of the Federal Reserve.

VMSXX is showing a 7 day SEC yield of 0.03% while VUSXX is at 0.06%.

It's interesting that the Treasury Money Market fund showed an increase first. The January dividend was nearly twice that of the December dividend.

It will feel better to receive at least some level of meaningful income from these funds. It's been a long wait!
Me too, but thanks to my native indolence, I've lost over 7% in real purchasing power over the last year while "waiting" for the rates to go up.
And what would your fixed-income alternative have been? Total Bond (VBMFX) has a total 1-year nominal return of -4.08%, so real about -11%. Cash at 0% to 0.5% has done better in real terms.

If you were comfortable buying short-term TIPS at negative real yields a year ago, you would have done better, but still lost money in real terms. 1-year return of VG short-term TIPS fund (VTAPX) is 3.63%, so about -3.5% real.

Kevin
I Bonds were the best deal.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by gmaynardkrebs »

Kevin M wrote: Thu Feb 17, 2022 6:23 pm
gmaynardkrebs wrote: Tue Feb 15, 2022 2:05 pm
Electron wrote: Tue Feb 15, 2022 1:36 pm The SEC yield on two Vanguard Money Market funds is already starting to rise ahead of the Federal Reserve.

VMSXX is showing a 7 day SEC yield of 0.03% while VUSXX is at 0.06%.

It's interesting that the Treasury Money Market fund showed an increase first. The January dividend was nearly twice that of the December dividend.

It will feel better to receive at least some level of meaningful income from these funds. It's been a long wait!
Me too, but thanks to my native indolence, I've lost over 7% in real purchasing power over the last year while "waiting" for the rates to go up.
And what would your fixed-income alternative have been? Total Bond (VBMFX) has a total 1-year nominal return of -4.08%, so real about -11%. Cash at 0% to 0.5% has done better in real terms.

If you were comfortable buying short-term TIPS at negative real yields a year ago, you would have done better, but still lost money in real terms. 1-year return of VG short-term TIPS fund (VTAPX) is 3.63%, so about -3.5% real.

Kevin
Yes, a dilemma. I've moved most short-term reserves into VTAPX. I feel it's UST safe, reasonably non-volatile, and even with the current negative yield, I think it's going to do better than Treasury MM, 6m bills at .63%, or Capital One at .4%. Do you have any recommendations? I'm readily persuadable. Not interested in I-Bonds.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by anon_investor »

gmaynardkrebs wrote: Thu Feb 17, 2022 9:58 pm
Kevin M wrote: Thu Feb 17, 2022 6:23 pm
gmaynardkrebs wrote: Tue Feb 15, 2022 2:05 pm
Electron wrote: Tue Feb 15, 2022 1:36 pm The SEC yield on two Vanguard Money Market funds is already starting to rise ahead of the Federal Reserve.

VMSXX is showing a 7 day SEC yield of 0.03% while VUSXX is at 0.06%.

It's interesting that the Treasury Money Market fund showed an increase first. The January dividend was nearly twice that of the December dividend.

It will feel better to receive at least some level of meaningful income from these funds. It's been a long wait!
Me too, but thanks to my native indolence, I've lost over 7% in real purchasing power over the last year while "waiting" for the rates to go up.
And what would your fixed-income alternative have been? Total Bond (VBMFX) has a total 1-year nominal return of -4.08%, so real about -11%. Cash at 0% to 0.5% has done better in real terms.

If you were comfortable buying short-term TIPS at negative real yields a year ago, you would have done better, but still lost money in real terms. 1-year return of VG short-term TIPS fund (VTAPX) is 3.63%, so about -3.5% real.

Kevin
Yes, a dilemma. I've moved most short-term reserves into VTAPX. I feel it's UST safe, reasonably non-volatile, and even with the current negative yield, I think it's going to do better than Treasury MM, 6m bills at .63%, or Capital One at .4%. Do you have any recommendations? I'm readily persuadable. Not interested in I-Bonds.
Why not I Bonds? 7.12% with 0 risk to principal is impossible to beat.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by gmaynardkrebs »

anon_investor wrote: Thu Feb 17, 2022 10:06 pm
gmaynardkrebs wrote: Thu Feb 17, 2022 9:58 pm
Kevin M wrote: Thu Feb 17, 2022 6:23 pm
gmaynardkrebs wrote: Tue Feb 15, 2022 2:05 pm
Electron wrote: Tue Feb 15, 2022 1:36 pm The SEC yield on two Vanguard Money Market funds is already starting to rise ahead of the Federal Reserve.

VMSXX is showing a 7 day SEC yield of 0.03% while VUSXX is at 0.06%.

It's interesting that the Treasury Money Market fund showed an increase first. The January dividend was nearly twice that of the December dividend.

It will feel better to receive at least some level of meaningful income from these funds. It's been a long wait!
Me too, but thanks to my native indolence, I've lost over 7% in real purchasing power over the last year while "waiting" for the rates to go up.
And what would your fixed-income alternative have been? Total Bond (VBMFX) has a total 1-year nominal return of -4.08%, so real about -11%. Cash at 0% to 0.5% has done better in real terms.

If you were comfortable buying short-term TIPS at negative real yields a year ago, you would have done better, but still lost money in real terms. 1-year return of VG short-term TIPS fund (VTAPX) is 3.63%, so about -3.5% real.

Kevin
Yes, a dilemma. I've moved most short-term reserves into VTAPX. I feel it's UST safe, reasonably non-volatile, and even with the current negative yield, I think it's going to do better than Treasury MM, 6m bills at .63%, or Capital One at .4%. Do you have any recommendations? I'm readily persuadable. Not interested in I-Bonds.
Why not I Bonds? 7.12% with 0 risk to principal is impossible to beat.
The yearly max is only $10K give or take. Even if I could put more in I-Bonds, I don't want my heirs to have to deal with Treasury Direct when I meet my maker and John Bogle in the great beyond.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by anon_investor »

gmaynardkrebs wrote: Thu Feb 17, 2022 10:16 pm
anon_investor wrote: Thu Feb 17, 2022 10:06 pm
gmaynardkrebs wrote: Thu Feb 17, 2022 9:58 pm
Kevin M wrote: Thu Feb 17, 2022 6:23 pm
gmaynardkrebs wrote: Tue Feb 15, 2022 2:05 pm Me too, but thanks to my native indolence, I've lost over 7% in real purchasing power over the last year while "waiting" for the rates to go up.
And what would your fixed-income alternative have been? Total Bond (VBMFX) has a total 1-year nominal return of -4.08%, so real about -11%. Cash at 0% to 0.5% has done better in real terms.

If you were comfortable buying short-term TIPS at negative real yields a year ago, you would have done better, but still lost money in real terms. 1-year return of VG short-term TIPS fund (VTAPX) is 3.63%, so about -3.5% real.

Kevin
Yes, a dilemma. I've moved most short-term reserves into VTAPX. I feel it's UST safe, reasonably non-volatile, and even with the current negative yield, I think it's going to do better than Treasury MM, 6m bills at .63%, or Capital One at .4%. Do you have any recommendations? I'm readily persuadable. Not interested in I-Bonds.
Why not I Bonds? 7.12% with 0 risk to principal is impossible to beat.
The yearly max is only $10K give or take. Even if I could put more in I-Bonds, I don't want my heirs to have to deal with Treasury Direct when I meet my maker and John Bogle in the great beyond.
You might as well just buy more equities and not sell, everything else is going to be ravaged by inflation...
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by gmaynardkrebs »

anon_investor wrote: Thu Feb 17, 2022 10:22 pm
gmaynardkrebs wrote: Thu Feb 17, 2022 10:16 pm
anon_investor wrote: Thu Feb 17, 2022 10:06 pm
gmaynardkrebs wrote: Thu Feb 17, 2022 9:58 pm
Kevin M wrote: Thu Feb 17, 2022 6:23 pm
And what would your fixed-income alternative have been? Total Bond (VBMFX) has a total 1-year nominal return of -4.08%, so real about -11%. Cash at 0% to 0.5% has done better in real terms.

If you were comfortable buying short-term TIPS at negative real yields a year ago, you would have done better, but still lost money in real terms. 1-year return of VG short-term TIPS fund (VTAPX) is 3.63%, so about -3.5% real.

Kevin
Yes, a dilemma. I've moved most short-term reserves into VTAPX. I feel it's UST safe, reasonably non-volatile, and even with the current negative yield, I think it's going to do better than Treasury MM, 6m bills at .63%, or Capital One at .4%. Do you have any recommendations? I'm readily persuadable. Not interested in I-Bonds.
Why not I Bonds? 7.12% with 0 risk to principal is impossible to beat.
The yearly max is only $10K give or take. Even if I could put more in I-Bonds, I don't want my heirs to have to deal with Treasury Direct when I meet my maker and John Bogle in the great beyond.
You might as well just buy more equities and not sell, everything else is going to be ravaged by inflation...
I have some news for you about equities and inflation that you are probably not going going to like.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by anon_investor »

gmaynardkrebs wrote: Thu Feb 17, 2022 10:42 pm
anon_investor wrote: Thu Feb 17, 2022 10:22 pm
gmaynardkrebs wrote: Thu Feb 17, 2022 10:16 pm
anon_investor wrote: Thu Feb 17, 2022 10:06 pm
gmaynardkrebs wrote: Thu Feb 17, 2022 9:58 pm Yes, a dilemma. I've moved most short-term reserves into VTAPX. I feel it's UST safe, reasonably non-volatile, and even with the current negative yield, I think it's going to do better than Treasury MM, 6m bills at .63%, or Capital One at .4%. Do you have any recommendations? I'm readily persuadable. Not interested in I-Bonds.
Why not I Bonds? 7.12% with 0 risk to principal is impossible to beat.
The yearly max is only $10K give or take. Even if I could put more in I-Bonds, I don't want my heirs to have to deal with Treasury Direct when I meet my maker and John Bogle in the great beyond.
You might as well just buy more equities and not sell, everything else is going to be ravaged by inflation...
I have some news for you about equities and inflation that you are probably not going going to like.
We are talking for the long term. Short term nobody knows nothing...

But if looking for principal protection, there are probably some FDIC insured online accounts out there paying around 1%, like TMobile Money.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Kevin M »

gmaynardkrebs wrote: Thu Feb 17, 2022 10:16 pm
anon_investor wrote: Thu Feb 17, 2022 10:06 pm
gmaynardkrebs wrote: Thu Feb 17, 2022 9:58 pm
Kevin M wrote: Thu Feb 17, 2022 6:23 pm
gmaynardkrebs wrote: Tue Feb 15, 2022 2:05 pm Me too, but thanks to my native indolence, I've lost over 7% in real purchasing power over the last year while "waiting" for the rates to go up.
And what would your fixed-income alternative have been? Total Bond (VBMFX) has a total 1-year nominal return of -4.08%, so real about -11%. Cash at 0% to 0.5% has done better in real terms.

If you were comfortable buying short-term TIPS at negative real yields a year ago, you would have done better, but still lost money in real terms. 1-year return of VG short-term TIPS fund (VTAPX) is 3.63%, so about -3.5% real.

Kevin
Yes, a dilemma. I've moved most short-term reserves into VTAPX. I feel it's UST safe, reasonably non-volatile, and even with the current negative yield, I think it's going to do better than Treasury MM, 6m bills at .63%, or Capital One at .4%. Do you have any recommendations? I'm readily persuadable. Not interested in I-Bonds.
Why not I Bonds? 7.12% with 0 risk to principal is impossible to beat.
The yearly max is only $10K give or take. Even if I could put more in I-Bonds, I don't want my heirs to have to deal with Treasury Direct when I meet my maker and John Bogle in the great beyond.
Exactly.

I Bonds don't help much if you have $200K available from a maturing CD. Similarly, they don't help much as an inflation hedge for a large portfolio.

And I agree that I don't want my heirs saddled with TD. I bought some I Bonds some years ago when they also were a great deal compared to TIPS, but then inflation went down a lot, and I ended up up earning very little on them by the time they hit the 5-year no penalty mark. So, I sold them all when they hit 5 years, and am not interested in the tiny amount of inflation hedging they would provide my portfolio, even though they are a great deal now.

Kevin
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Electron »

Kevin M wrote: Thu Feb 17, 2022 6:23 pm And what would your fixed-income alternative have been? Total Bond (VBMFX) has a total 1-year nominal return of -4.08%, so real about -11%. Cash at 0% to 0.5% has done better in real terms.
I was just reminded that long term U.S. Government bonds performed reasonably well relative to inflation in the period 1927 through 1997. John Bogle's book Common Sense on Mutual Funds shows a nominal return of 5.3% over that period. Time will tell how the current environment impacts long term bond market returns. The 10 year Treasury yield today at 2% seems totally out of line relative to inflation.

Money Market yields continue to move up. VMSXX is now showing a 7 day SEC yield of 0.10% while VUSXX has moved up to 0.11%. The SIFMA Municipal Swap Index is currently at 0.24% so Municipal Money Market yields should be headed up.

https://www.bloomberg.com/quote/MUNIPSA:IND

It's interesting that the Vanguard Federal Money Market fund is still showing an SEC yield of 0.01%.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by anon_investor »

Electron wrote: Sun Mar 13, 2022 5:30 pm
Kevin M wrote: Thu Feb 17, 2022 6:23 pm And what would your fixed-income alternative have been? Total Bond (VBMFX) has a total 1-year nominal return of -4.08%, so real about -11%. Cash at 0% to 0.5% has done better in real terms.
I was just reminded that long term U.S. Government bonds performed reasonably well relative to inflation in the period 1927 through 1997. John Bogle's book Common Sense on Mutual Funds shows a nominal return of 5.3% over that period. Time will tell how the current environment impacts long term bond market returns. The 10 year Treasury yield today at 2% seems totally out of line relative to inflation.

Money Market yields continue to move up. VMSXX is now showing a 7 day SEC yield of 0.10% while VUSXX has moved up to 0.11%. The SIFMA Municipal Swap Index is currently at 0.24% so Municipal Money Market yields should be headed up.

https://www.bloomberg.com/quote/MUNIPSA:IND

It's interesting that the Vanguard Federal Money Market fund is still showing an SEC yield of 0.01%.
Money market funds are still not worth it until their yields exceed the 0.5% APY offered by many HYSAs.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Kevin M »

Electron wrote: Sun Mar 13, 2022 5:30 pm <snip> The 10 year Treasury yield today at 2% seems totally out of line relative to inflation.
<snip>
Apparently it's not out of line with expected inflation over the next 10 years. The 10-year real yield is -0.94%, so the 10-year breakeven inflation (BEI) rate is 2.94%, and we can take this as a first-order approximation of expected inflation (ignoring yield premiums/discounts, and Fed tampering with bond markets).

BEI has increased across the yield curve since the beginning of the year, and decreases with maturity.

Image

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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by gmaynardkrebs »

Kevin M wrote: Sun Mar 13, 2022 8:52 pm
Electron wrote: Sun Mar 13, 2022 5:30 pm <snip> The 10 year Treasury yield today at 2% seems totally out of line relative to inflation.
<snip>
Apparently it's not out of line with expected inflation over the next 10 years. The 10-year real yield is -0.94%, so the 10-year breakeven inflation (BEI) rate is 2.94%, and we can take this as a first-order approximation of expected inflation (ignoring yield premiums/discounts, and Fed tampering with bond markets).

BEI has increased across the yield curve since the beginning of the year, and decreases with maturity.

Image

Kevin
Kevin (or someone), correct me if I'm wrong, but I believe that historically, the correlation between expected inflation and realized inflation has been quite low. It may be a first order approximation, but it's not a terribly predictive one. One reason may be that inflation is more a socio-political phenomenon than than an "economics one. Marxists posited that inflation was simply the the way that class conflict manifests itself in a highly monetized society like out own, which at least is part is what seems to be in play today at the most basic level.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Kevin M »

gmaynardkrebs wrote: Sun Mar 13, 2022 11:07 pm
Kevin M wrote: Sun Mar 13, 2022 8:52 pm
Electron wrote: Sun Mar 13, 2022 5:30 pm <snip> The 10 year Treasury yield today at 2% seems totally out of line relative to inflation.
<snip>
Apparently it's not out of line with expected inflation over the next 10 years. The 10-year real yield is -0.94%, so the 10-year breakeven inflation (BEI) rate is 2.94%, and we can take this as a first-order approximation of expected inflation (ignoring yield premiums/discounts, and Fed tampering with bond markets).

BEI has increased across the yield curve since the beginning of the year, and decreases with maturity.

Image

Kevin
Kevin (or someone), correct me if I'm wrong, but I believe that historically, the correlation between expected inflation and realized inflation has been quite low. It may be a first order approximation, but it's not a terribly predictive one. One reason may be that inflation is more a socio-political phenomenon than than an "economics one. Marxists posited that inflation was simply the the way that class conflict manifests itself in a highly monetized society like out own, which at least is part is what seems to be in play today at the most basic level.
I was simply pointing out that medium-term to long-term nominal yields aren't out of line with expected inflation as determined by the Treasury markets. An institutional investor can invest in nominal Treasuries or TIPS. If realized inflation is higher than the BEI, TIPS will do better, and vice versa. BEI is determined by institutional investors putting their money where their expectations are.

Kevin
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Lyrrad »

anon_investor wrote: Sun Mar 13, 2022 6:33 pm Money market funds are still not worth it until their yields exceed the 0.5% APY offered by many HYSAs.
Personally, I monitor the yield curve at a Treasury page ("DAILY TREASURY PAR YIELD CURVE RATES").

I assume that the yield curve for periods of a year or less is about the expected average Fed funds rate for that period, so today's 1 month rate of 0.23% and 3 month rate of 0.45%, and 6 month rate of 0.86% makes me think that rates are expected to be over 0.50% in less than three months and over 1% in six months.

As rates start to rise, I'll likely shift my short-term funds from savings accounts to money markets and Treasury ladders.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by anon_investor »

Lyrrad wrote: Mon Mar 14, 2022 8:44 pm
anon_investor wrote: Sun Mar 13, 2022 6:33 pm Money market funds are still not worth it until their yields exceed the 0.5% APY offered by many HYSAs.
Personally, I monitor the yield curve at a Treasury page ("DAILY TREASURY PAR YIELD CURVE RATES").

I assume that the yield curve for periods of a year or less is about the expected average Fed funds rate for that period, so today's 1 month rate of 0.23% and 3 month rate of 0.45%, and 6 month rate of 0.86% makes me think that rates are expected to be over 0.50% in less than three months and over 1% in six months.

As rates start to rise, I'll likely shift my short-term funds from savings accounts to money markets and Treasury ladders.
I will too once rates rise, I used to keep some money in Vanguard money market funds until the rates dropped lower than HYSAs.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Electron »

Kevin M wrote: Sun Mar 13, 2022 8:52 pmApparently it's not out of line with expected inflation over the next 10 years. The 10-year real yield is -0.94%, so the 10-year breakeven inflation (BEI) rate is 2.94%, and we can take this as a first-order approximation of expected inflation (ignoring yield premiums/discounts, and Fed tampering with bond markets).
Thanks for the comments and chart. The expected inflation numbers do seem reasonable after considering the averaging effects over five or ten years. We may have the current period of relatively high inflation followed by a number of years at lower levels. A drop in the CPI is also possible as we have seen in the past. I hope we can return to the fairly low inflation numbers of the last few decades.

I recently purchased a number of T-Bills at auction which was a first for me. It certainly is an easy process. Today the 13 week rate rose to 0.45% which was higher than I expected.

https://www.treasurydirect.gov/instit/a ... result.htm
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by neurosphere »

Quick question(s), which I will also try to answer for myself.

-- How tightly correlated is the federal funds rate and money market funds? I assume someone has made a graph in this or another thread, and I hope to research this soon.
-- And, I assume there are differences between MM funds, such as Treasury vs muni...
-- How much of a delay is there between a funds rate increase and an increase in MM yields? I assume the answer depends on the average maturity of the fund, and that also we'll be able to "see" the answer to this question in real time over the next few weeks.

Main reason I ask is just personal curiosity/interest, but I have a risk averse buddy that wants to pay down a 2.1% mortgage. I suspect MM funds will soon pay more than that, or at least close enough that it's not worth it to pay that mortgage now. This is in CA, and is in highest tax bracket (i.e. good candidate for a CA muni fund).
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Kevin M »

neurosphere wrote: Thu May 05, 2022 2:16 pm Quick question(s), which I will also try to answer for myself.

-- How tightly correlated is the federal funds rate and money market funds? I assume someone has made a graph in this or another thread, and I hope to research this soon.
-- And, I assume there are differences between MM funds, such as Treasury vs muni...
-- How much of a delay is there between a funds rate increase and an increase in MM yields? I assume the answer depends on the average maturity of the fund, and that also we'll be able to "see" the answer to this question in real time over the next few weeks.

Main reason I ask is just personal curiosity/interest, but I have a risk averse buddy that wants to pay down a 2.1% mortgage. I suspect MM funds will soon pay more than that, or at least close enough that it's not worth it to pay that mortgage now. This is in CA, and is in highest tax bracket (i.e. good candidate for a CA muni fund).
Vanguard Treasury MM holds mostly 1m to 3m T bills. The average maturity now is a little over 30 days, so it tracks the 1m Treasury rate minus ER pretty closely. Previously, when the average maturity was closer to 45 days it tracked the average of 1m, 2m, and 3m Treasuries quite closely.

The 1m Treasury tracks the effective federal funds rate (EFFR) pretty closely, often a bit lower, and now lower than usual, so I expect it to increase more over the next days, although it did not increase today. See this thread: 1-month Treasury and Federal Funds Rate.

Of course there are differences between fund yields. As has been discussed, probably in this thread, the municipal money market fund yields are somewhat cyclical, so sometimes will cycle higher than Treasury MM, for example, and then will fall.

If in a taxable account, we are interested in taxable-equivalent yields (TEYs) or after-tax yields. Here is recent history of Vanguard MM fund TEYs for my expected marginal tax rates of 22% fed, 9.3% state:

Image

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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Electron »

The yield on the SIFMA Municipal Swap Index rose to 0.60% earlier this week. The 7 day SEC yield on VMSXX should be headed higher from the latest quote at 0.41%.

https://www.bloomberg.com/quote/MUNIPSA:IND

If you click on the chart you can view different time periods.

https://www.sifma.org/resources/researc ... wap-index/

"The Index was created in response to industry participants’ demand for a short-term index which accurately reflected activity in the VRDO market."

Short term Municipal yields do have seasonal patterns. Yields often rise in April when checks are written on these funds to make tax payments. The yields on VRDOs also seem to rise in periods of financial stress as we saw in March 2020.

It looks like the Treasury Yield Curve steepened this week. Note how the 3 month and 6 month yields declined while the 30 year yield increased.

https://home.treasury.gov/resource-cent ... nth=202205
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Kookaburra »

Firing up this thread, as VMSXX TEYs have passed most HYSAs. Hope it’s not the quarterly anomaly.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by gmaynardkrebs »

Kookaburra wrote: Fri May 20, 2022 11:16 pm Firing up this thread, as VMSXX TEYs have passed most HYSAs. Hope it’s not the quarterly anomaly.
Still quite negative real yield (approx -7%) current .67%. Personally, I prefer VWSUX (short muni; 1.1Y duration), which is at a 10Y low at 1.52% for anything other than immediate cash needs. Nothing to cheer about with either, however.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Kookaburra »

gmaynardkrebs wrote: Sat May 21, 2022 8:12 am
Kookaburra wrote: Fri May 20, 2022 11:16 pm Firing up this thread, as VMSXX TEYs have passed most HYSAs. Hope it’s not the quarterly anomaly.
Still quite negative real yield (approx -7%) current .67%. Personally, I prefer VWSUX (short muni; 1.1Y duration), which is at a 10Y low at 1.52% for anything other than immediate cash needs. Nothing to cheer about with either, however.
It’s peculiar how savings/MM yields are always viewed through a “real” lens, while stocks and often bonds are viewed through a “nominal” lens.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by gmaynardkrebs »

Kookaburra wrote: Sat May 21, 2022 10:09 am
gmaynardkrebs wrote: Sat May 21, 2022 8:12 am
Kookaburra wrote: Fri May 20, 2022 11:16 pm Firing up this thread, as VMSXX TEYs have passed most HYSAs. Hope it’s not the quarterly anomaly.
Still quite negative real yield (approx -7%) current .67%. Personally, I prefer VWSUX (short muni; 1.1Y duration), which is at a 10Y low at 1.52% for anything other than immediate cash needs. Nothing to cheer about with either, however.
It’s peculiar how savings/MM yields are always viewed through a “real” lens, while stocks and often bonds are viewed through a “nominal” lens.
TIPS.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by anon_investor »

gmaynardkrebs wrote: Sat May 21, 2022 12:21 pm
Kookaburra wrote: Sat May 21, 2022 10:09 am
gmaynardkrebs wrote: Sat May 21, 2022 8:12 am
Kookaburra wrote: Fri May 20, 2022 11:16 pm Firing up this thread, as VMSXX TEYs have passed most HYSAs. Hope it’s not the quarterly anomaly.
Still quite negative real yield (approx -7%) current .67%. Personally, I prefer VWSUX (short muni; 1.1Y duration), which is at a 10Y low at 1.52% for anything other than immediate cash needs. Nothing to cheer about with either, however.
It’s peculiar how savings/MM yields are always viewed through a “real” lens, while stocks and often bonds are viewed through a “nominal” lens.
TIPS.
What duration?
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