Risk comparison: VMMXX vs VMFXX vs VUSXX?

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LongTermEtfHolder
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Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by LongTermEtfHolder »

Looking to decide between these 3 for the safest portion of my portfolio: my emergency fund.

Current yields:
VMFXX: 2.33%
VUSXX: 2.34%
VMMXX: 2.51% (2.57% if you get the Admiral shares under the symbol VMRXX)

I know very little about fixed income. Can only assume VMMXX holding is a bit riskier to justify the higher yields.

I'm thinking of putting about $100k into the fund, so the yield differences are negligible: the largest different (VMMXX - VMFXX) would be $240/year.

So I'm more interested in the one that would be safest, and definitely allow me to draw my funds in case of a real emergency, including a financial crisis like 2008.
Garfieldthecat
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Garfieldthecat »

Keep in mind state tax (if applicable).

No state tax on VSUXX.

VMMXX has state tax on the 100% of the dividends, and VMFXX has a percentage (30%? 50%?) of state tax on the dividends due to the fund makeup.

Edit: OF course, this has nothing to do with risk. But it might be that a safer fund (VSUXX) might actually give a little more money because of state tax.
dbr
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by dbr »

Can you tell us what those funds are? I guess a fund of US Treasuries only is safer than something that isn't and if you want to go to that extreme in your concerns, that would be the choice.

I don't know if it is safer to hold Treasuries directly at Treasury Direct than in a mutual fund when there is a financial crisis. Probably again going to extremes here.
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LongTermEtfHolder
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by LongTermEtfHolder »

Garfieldthecat wrote: Tue Jan 29, 2019 9:31 am No state tax on VSUXX.

VMMXX has state tax on the 100% of the dividends, and VMFXX has a percentage (30%? 50%?) of state tax on the dividends due to the fund makeup.
Very interesting and relevant, since I live in a relatively high state tax state and pay a high tax bracket.

How does taxing work on something like VMMXX and VMFXX?

Do I pay tax on gains every year? Or only if I sell?
Pigeye Brewster
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Pigeye Brewster »

LongTermEtfHolder wrote: Tue Jan 29, 2019 9:50 am
Garfieldthecat wrote: Tue Jan 29, 2019 9:31 am No state tax on VSUXX.

VMMXX has state tax on the 100% of the dividends, and VMFXX has a percentage (30%? 50%?) of state tax on the dividends due to the fund makeup.
Very interesting and relevant, since I live in a relatively high state tax state and pay a high tax bracket.

How does taxing work on something like VMMXX and VMFXX?

Do I pay tax on gains every year? Or only if I sell?
If by "gains" you mean capital gains, with a retail money market fund you should never have any. Just dividend income.

Since you asked for the safest fund, VUSXX is definitely the safest fund of the three since it is all Treasuries. As noted above, because of that, it is also exempt from state income tax.
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LongTermEtfHolder
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by LongTermEtfHolder »

Pigeye Brewster wrote: Tue Jan 29, 2019 9:57 am If by "gains" you mean capital gains, with a retail money market fund you should never have any. Just dividend income.
Is there anything I can do to minimize tax on dividend income?

My current plan is to just reinvest all dividends automatically with the principal.
Garfieldthecat
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Garfieldthecat »

LongTermEtfHolder wrote: Tue Jan 29, 2019 9:50 am
Garfieldthecat wrote: Tue Jan 29, 2019 9:31 am No state tax on VSUXX.

VMMXX has state tax on the 100% of the dividends, and VMFXX has a percentage (30%? 50%?) of state tax on the dividends due to the fund makeup.
Very interesting and relevant, since I live in a relatively high state tax state and pay a high tax bracket.

How does taxing work on something like VMMXX and VMFXX?

Do I pay tax on gains every year? Or only if I sell?
It's all dividends. VMMXX dividends are 100% state taxable. VMFXX dividends are partially taxed at the state level.

See this forum thread: Link

And this webpage:

https://thefinancebuff.com/which-vangua ... -fund.html
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1210sda
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by 1210sda »

LongTermEtfHolder wrote: Tue Jan 29, 2019 9:22 am VMMXX: 2.51% (2.57% if you get the Admiral shares under the symbol VMRXX)
VMRXX has a $5,000,000.00 minimum!
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Fclevz »

Garfieldthecat wrote: Tue Jan 29, 2019 9:31 amVMMXX has state tax on the 100% of the dividends
You must be in one of the high tax states like California, Connecticut, New York, New Jersey.
Because VMMXX has some U.S. government holdings (20.4% last year) that are not state taxable in flyover country :D
nolesrule
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by nolesrule »

Fclevz wrote: Tue Jan 29, 2019 10:22 am
Garfieldthecat wrote: Tue Jan 29, 2019 9:31 amVMMXX has state tax on the 100% of the dividends
You must be in one of the high tax states like California, Connecticut, New York, New Jersey.
Because VMMXX has some U.S. government holdings (20.4% last year) that are not state taxable in flyover country :D
That ~20% of income from government obligations from VMMXX is not taxable in New Jersey either.
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greg24
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by greg24 »

How do you define risk?

That they'll break the buck?

If so, the risk on all three is similarly barely existent and I wouldn't use to determine which one to invest in.
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by JackoC »

LongTermEtfHolder wrote: Tue Jan 29, 2019 9:22 am Looking to decide between these 3 for the safest portion of my portfolio: my emergency fund.

Current yields:
VMFXX: 2.33%
VUSXX: 2.34%
VMMXX: 2.51% (2.57% if you get the Admiral shares under the symbol VMRXX)

I know very little about fixed income. Can only assume VMMXX holding is a bit riskier to justify the higher yields.

I'm thinking of putting about $100k into the fund, so the yield differences are negligible: the largest different (VMMXX - VMFXX) would be $240/year.

So I'm more interested in the one that would be safest, and definitely allow me to draw my funds in case of a real emergency, including a financial crisis like 2008.
Among the main three mentioned, the categorical difference, under the 2016 SEC rule on money market funds, is that VMFXX and VUSXX are 'government' MMF's, VMMXX is a 'retail' MMF. Which means the latter is automatically subject to (potential) withdrawal fees and delays in case of a crisis. Look up 'redemption gate' on Vang's site and a pop up explains

"Liquidity fees and gates are tools to help money market fund managers keep the funds stable during times of extreme market duress. Under the rules:
A fund may impose a fee of up to 2% on redemptions if a fund's weekly liquid assets fall below 30% of its total assets.
A fund must impose a 1% fee on redemptions (with the option of imposing a fee of up to 2%) if a fund's weekly liquid assets fall below 10% of its total assets—unless the fund's board determines a fee would not be in the fund's best interest.
A fund may impose a gate—that is, suspend redemptions—for up to 10 business days in a 90-day period.
The fees and gates rules only apply to retail and institutional funds, although government funds may voluntarily adopt them if the fees and gates are previously disclosed to investors."

Vanguard does not voluntarily adopt the fee and gate rules for its government funds currently.

For tax purposes as was mentioned interest from direct US govt obligations isn't state taxable. That was ~28% in 2018 for VMMXX, around 78% for VMFXX, 100% of VUSXX's*. VUSXX has a slightly higher after tax return than VMFXX, for me, though is less risky so is theoretically simply superior to VMFXX**. In case of VMMXX v either of the others, it's more risk for more after tax return so a matter of risk preference, also including the potential hassle of the liquidity fee/gate stuff.

The biggest category recently in VMMXX, ~56%, is 'Yankee/foreign' or IOW short term $ denominated debt of highly rated foreign entities issued in the US ('Yankee') and overseas ('foreign').

Fixed income is simple compared to stocks...except when you look under the hood of even supposedly fairly simple things like MMF and usually find it's not really simple. How does the average investor quantify the risk difference between VMMXX and the other two? I guess most people using VMMXX just want some more bps and aren't researching all that carefully what the difference is but figure it must be OK. And I'm not saying it isn't OK. I just figure for cash where I'm not counting on making much either way, I'll just go with the even safer one**.

*in some states a fund has to reach a 50% federal assets threshold for the federal interest % to matter, in most it does not.
**but Vanguard won't AFAIK let you use VUSXX as your settlement fund so it's more hassle xferring money back and forth from the settlement fund (VMFXX) to VUSXX, and VUSXX is only ~0.02% better after tax for me, for limited amounts of cash, so I don't use VUSXX.
Last edited by JackoC on Tue Jan 29, 2019 10:35 am, edited 1 time in total.
Pigeye Brewster
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Pigeye Brewster »

LongTermEtfHolder wrote: Tue Jan 29, 2019 10:07 am
Pigeye Brewster wrote: Tue Jan 29, 2019 9:57 am If by "gains" you mean capital gains, with a retail money market fund you should never have any. Just dividend income.
Is there anything I can do to minimize tax on dividend income?

My current plan is to just reinvest all dividends automatically with the principal.
Use a municipal money market fund like Vanguard Municipal Money Market (VMSXX). And California, New York, New Jersey and Pennsylvania have state specific funds if you are a resident of one of those.

But a municipal fund is not as safe as VUSXX or VMFXX.
3funder
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by 3funder »

None of these funds are particularly risky. I invest my "slush" fund (short-term needs -- 5 years or less) in VMMXX, and I sleep like a baby.
Global stocks, US bonds, and time.
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greg24
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by greg24 »

3funder wrote: Tue Jan 29, 2019 10:35 amNone of these funds are particularly risky. I invest my "slush" fund (short-term needs -- 5 years or less) in VMMXX, and I sleep like a baby.
I'm happy to find another person who refers to it as their slush fund. :sharebeer
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travelogue
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by travelogue »

After researching the Vanguard MMF options, I decided to generally use VMFXX for the following reasons, in rough order of importance:
  1. Easy logistics as it's my settlement fund
  2. Decent tax equivalent yield as compared to VMMXX
  3. No minimum investment
  4. Fractionally less risky than VMMXX (though I'd consider VMMXX very, very safe)
  5. No gates or redemption restrictions (though I wouldn't expect for these to be a real-world issue either)
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by ruralavalon »

LongTermEtfHolder wrote: Tue Jan 29, 2019 9:22 am Looking to decide between these 3 for the safest portion of my portfolio: my emergency fund.

Current yields:
VMFXX: 2.33%
VUSXX: 2.34%
VMMXX: 2.51% (2.57% if you get the Admiral shares under the symbol VMRXX)

I know very little about fixed income. Can only assume VMMXX holding is a bit riskier to justify the higher yields.

I'm thinking of putting about $100k into the fund, so the yield differences are negligible: the largest different (VMMXX - VMFXX) would be $240/year.

So I'm more interested in the one that would be safest, and definitely allow me to draw my funds in case of a real emergency, including a financial crisis like 2008.
Little real difference in risk, in my opinion.
LongTermEtfHolder wrote: Tue Jan 29, 2019 9:50 am
Garfieldthecat wrote: Tue Jan 29, 2019 9:31 am No state tax on VSUXX.

VMMXX has state tax on the 100% of the dividends, and VMFXX has a percentage (30%? 50%?) of state tax on the dividends due to the fund makeup.
Very interesting and relevant, since I live in a relatively high state tax state and pay a high tax bracket.

How does taxing work on something like VMMXX and VMFXX?

Do I pay tax on gains every year? Or only if I sell?
What State do you pay any State income taxes in?

There are some state specific money market funds available.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Topic Author
LongTermEtfHolder
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by LongTermEtfHolder »

Thanks for all the helpful comments, guys.

The emerging consensus is:
  1. VUSXX is the safest because of its pure T-Bills composition.
  2. VMFXX is second safest.
  3. VMMXX is the least safe and is also gated, which makes it unsuitable for an emergency fund
Thus VUSXX is the safest choice. It is safer than VMFXX since it yields the same, but is also exempt from state and local taxes.

So VUSXX is strictly superior to VMFXX.

VMMXX tiny yield advantage over VUSXX isn't worth the extra risk and gating, particularly for a relatively small fixed amount intended to be used as an emergency fund.

In fact with its tax advantages, VUSXX might be strictly superior - both lower risk and higher yield - unless state and local taxes are very low where you live.
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by gowest »

travelogue wrote: Tue Jan 29, 2019 11:10 am After researching the Vanguard MMF options, I decided to generally use VMFXX for the following reasons, in rough order of importance:
  1. Easy logistics as it's my settlement fund
  2. Decent tax equivalent yield as compared to VMMXX
  3. No minimum investment
  4. Fractionally less risky than VMMXX (though I'd consider VMMXX very, very safe)
  5. No gates or redemption restrictions (though I wouldn't expect for these to be a real-world issue either)
Likewise, after much research into the three options referenced by OP, I too decided to use VMFXX, and I did so for these same reasons.
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by JackoC »

Here's my after tax yield on each of the three. Federal marginal rate 24%+3.8% Net Investment Tax, NJ marginal rate 6.5% only on the portion that's not federal obligation. In 2018 as per Vanguard's recent release, 100% of VUSXX, 77.79% of VMFXX and 28.23% of VMMX interest was not taxable by NJ
https://personal.vanguard.com/pdf/USGO_012019.pdf
VUSXX: compound yield 2.34%*(1-.278)=1.69%
VMFXX: compound yield 2.33%*(1-.278-(1-.7779)*.065)=1.65%
VMMXX compound yield 2.51%*(1-.278-(1-.2823)*.065)=1.70%

Thus if I was strictly optimizing for risk v return, I believe VUSXX would be best. But, for convenience/laziness I just keep spare cash in VMFXX, the settlement fund. But I believe VMFXX is superior to VMMXX for the risk, small risk difference, but a very small return difference.

Note that these relative yields do move around somewhat. VMFXX for example more typically yields a few bp more than VUSXX pre tax rather than less as it does right now: the after tax advantage of VUSXX over VMFXX for me is typically more like 2 or 3 than 4 bps.

In my tax situation muni MMF's aren't competitive, VMSXX 1.32% pre tax, ~1.23% after NJ tax. The NJ only VNJXX 1.28%. Those also move around, more than taxable do, seasonal also, but the muni funds rarely yield more AT for me in recent years.
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by LongTermEtfHolder »

JackoC wrote: Tue Jan 29, 2019 1:18 pm VUSXX: compound yield 2.34%*(1-.278)=1.69%
VMFXX: compound yield 2.33%*(1-.278-(1-.7779)*.065)=1.65%
VMMXX compound yield 2.51%*(1-.278-(1-.2823)*.065)=1.70%

Thus if I was strictly optimizing for risk v return, I believe VUSXX would be best. But, for convenience/laziness I just keep spare cash in VMFXX, the settlement fund. But I believe VMFXX is superior to VMMXX for the risk, small risk difference, but a very small return difference.
This is great work, exactly the kind of reasoning I was aiming for.

Looks like VMMXX is out of the race, I'll probably do VUSXX but might just do VMFXX and treat it like a checking account almost.

From your calculation I understand that all yields (aka dividends) on all these funds are taxed. Guess there's no sort of Long-Term Capital Gains or "no tax until you sell" exemptions for fixed income funds?
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travelogue
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by travelogue »

LongTermEtfHolder wrote: Tue Jan 29, 2019 3:28 pm From your calculation I understand that all yields (aka dividends) on all these funds are taxed. Guess there's no sort of Long-Term Capital Gains or "no tax until you sell" exemptions for fixed income funds?
Interest from federal treasury securities is generally exempt from state (but not federal) taxes. Therefore, you can look up the proportion of yield from treasuries and exclude that from state taxation. (I think some states require the majority of the fund to be exempt.)
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by JackoC »

LongTermEtfHolder wrote: Tue Jan 29, 2019 3:28 pm
JackoC wrote: Tue Jan 29, 2019 1:18 pm VUSXX: compound yield 2.34%*(1-.278)=1.69%
VMFXX: compound yield 2.33%*(1-.278-(1-.7779)*.065)=1.65%
VMMXX compound yield 2.51%*(1-.278-(1-.2823)*.065)=1.70%

Thus if I was strictly optimizing for risk v return, I believe VUSXX would be best. But, for convenience/laziness I just keep spare cash in VMFXX, the settlement fund. But I believe VMFXX is superior to VMMXX for the risk, small risk difference, but a very small return difference.
This is great work, exactly the kind of reasoning I was aiming for.

Looks like VMMXX is out of the race, I'll probably do VUSXX but might just do VMFXX and treat it like a checking account almost.

From your calculation I understand that all yields (aka dividends) on all these funds are taxed. Guess there's no sort of Long-Term Capital Gains or "no tax until you sell" exemptions for fixed income funds?
All interest on the 'taxable' funds, the three you started with, is federally taxable. The % of the interest taxed by state depends on whether the interest comes from federal obligations, and state laws (as I mentioned and somebody else reiterated, some states require 50% of the fund *assets* to be federal obligations in order not to tax the interest, but generally the proportion of interest that's state taxable will be the proportion from federal obligations as in my example).

The 2016 SEC rules require the third category of money market fund, 'institutional', to have a market to market NAV so capital gains and losses could occur. But VMMXX is 'retail' and the other two 'government'. Those types of MMF's are still permitted to have a fixed NAV of $1 and there would only be capital loss/gain in the event of sale/purchase in the wake of the exceptional and undesirable case of the fund 'breaking the buck' due to credit losses. For 'fixed income' funds generally as in also including bond funds, the NAV is market to market and there's usually is at least a small capital gain/loss on every sale, which is a reason it's less convenient to write checks from even relatively stable short term bond funds compared to money market funds, and also a also a reason for the strong push back when the SEC initially suggested floating NAV's for all MMF's. Hassle entering each sale on your tax return even if the tax amounts aren't significant.
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by gowest »

LongTermEtfHolder wrote: Tue Jan 29, 2019 3:28 pm Looks like VMMXX is out of the race, I'll probably do VUSXX but might just do VMFXX and treat it like a checking account almost.
Not to veer too far off topic, but that's what I do. I have a VanguardAdvantage brokerage account, and in that account I hold VMFXX (among other funds). VMFXX serves a couple of purposes. Foremost, it's where I hold my cash reserves (aka emergency fund). I also use VMFXX in the brokerage account for ACH transactions. As a prime example, we churn all expenses through various credit cards (to get cash back / rewards), and then we pay those balances in full each month using ACH transactions on the very last day possible, which let's us earn money for as long as possible before the bill is paid. Plus, they're set up on auto-pay, so it's truly easy. The account also gives you check-writing, ATM access, etc. So basically it works a lot like a checking account (with an account number and routing number, etc.).

Another benefit of using VMFXX (over VMMXX or VUSXX) in this account is that VMFXX is also the settlement fund, so I don't have to exchange money between, for example, VMFXX and VMMXX.

You have to be at least a "Voyager Select" client to have a VanguardAdvantage brokerage account. And there are some fees ($30 annually, I think) unless you're "Flagship" or higher (then it's $0). Anyway, mentioning this FWIW, since you mentioned possibly using VMFXX as a checking account.

Hope this is helpful (or at least interesting)!
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by teamDE »

Looks like VUSXX is now closed. Interesting.

VMFXX is now yielding higher than VMMXX so i guess its a no brainer to use the default settlement account. Lower state taxes as well.
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Alan S. »

teamDE wrote: Fri Aug 14, 2020 10:05 am Looks like VUSXX is now closed. Interesting.

VMFXX is now yielding higher than VMMXX so i guess its a no brainer to use the default settlement account. Lower state taxes as well.
Even more so when you check the footnotes "t" and "tt" at the end of this link:
https://investor.vanguard.com/investing ... nvestments

Less risk of liquidity issues with VMFXX.
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by grabiner »

Alan S. wrote: Fri Aug 14, 2020 12:27 pm
teamDE wrote: Fri Aug 14, 2020 10:05 am Looks like VUSXX is now closed. Interesting.

VMFXX is now yielding higher than VMMXX so i guess its a no brainer to use the default settlement account. Lower state taxes as well.
Even more so when you check the footnotes "t" and "tt" at the end of this link:
https://investor.vanguard.com/investing ... nvestments
These are legal disclaimers which don't represent the real risks. Money-market funds are required to include these warnings about the lack of a guaranteed value of $1 per share. Other funds, which are subject to much greater risks, don't include this disclaimer because the fluctuating share price makes it clear that the value is not guaranteed.
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Alan S. »

grabiner wrote: Fri Aug 14, 2020 12:58 pm
Alan S. wrote: Fri Aug 14, 2020 12:27 pm
teamDE wrote: Fri Aug 14, 2020 10:05 am Looks like VUSXX is now closed. Interesting.

VMFXX is now yielding higher than VMMXX so i guess its a no brainer to use the default settlement account. Lower state taxes as well.
Even more so when you check the footnotes "t" and "tt" at the end of this link:
https://investor.vanguard.com/investing ... nvestments
These are legal disclaimers which don't represent the real risks. Money-market funds are required to include these warnings about the lack of a guaranteed value of $1 per share. Other funds, which are subject to much greater risks, don't include this disclaimer because the fluctuating share price makes it clear that the value is not guaranteed.
The footnotes are identical with respect to breaking the buck. However, the footnotes differ between VG's prime MM fund and the federal (settlement fund) with respect to liquidity fees and gates.
Understanding liquidity fees & gates
Liquidity fees and gates are tools to help money market fund managers keep the funds stable during times of extreme market duress. Under the rules:

A fund may impose a fee of up to 2% on redemptions if a fund's weekly liquid assets fall below 30% of its total assets.
A fund must impose a 1% fee on redemptions (with the option of imposing a fee of up to 2%) if a fund's weekly liquid assets fall below 10% of its total assets—unless the fund's board determines a fee would not be in the fund's best interest.
A fund may impose a gate—that is, suspend redemptions—for up to 10 business days in a 90-day period.
The fees and gates rules only apply to retail and institutional funds, although government funds may voluntarily adopt them if the fees and gates are previously disclosed to investors.

The boards of directors of Vanguard's government funds have decided to impose neither fees nor gates.
VG indicates that only the government funds will not be subject to these restrictions, which suggests they are possible on the prime fund, or at least might be levied on the prime fund before the govt funds. Am I missing something?
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Electron »

teamDE wrote: Fri Aug 14, 2020 10:05 amVMFXX is now yielding higher than VMMXX so i guess its a no brainer to use the default settlement account. Lower state taxes as well.
It is surprising to see Prime Money Market yielding less than the Federal and Treasury Money Market funds. That is generally not the case.

The higher yields may be the result of the two year Treasury Floating Rate Notes (FRNs) held in the Federal and Treasury Money Market funds.

Treasury Floating Rate Notes pay a rate determined by the most recent 13 week T-Bill discount rate plus a fixed spread determined at the time of the FRN auction.

The Treasury fund recently held six FRNs with spreads of 0.300%, 0.220%, 0.154%, 0.139%, 0.115%, and 0.114%. Those spreads are quite attractive at present with 13 week T-Bills at 0.10%.

The spread at the most recent Treasury FRN auction was 0.055%. Here is the Treasury site showing results from recent Treasury auctions. You can click on Bills, CMBs, Notes, Bonds, TIPS, and FRNs.

https://www.treasurydirect.gov/instit/a ... result.htm
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by dfin »

Regarding these three funds (VMFXX, VUSXX, VMMXX). Is it fair to say that your discussion on taxes centers on non-retirement accounts? Retirement withdrawals are treating as income regardless of the funds above, correct?
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by anon_investor »

dfin wrote: Sun Jun 13, 2021 8:45 am Regarding these three funds (VMFXX, VUSXX, VMMXX). Is it fair to say that your discussion on taxes centers on non-retirement accounts? Retirement withdrawals are treating as income regardless of the funds above, correct?
It doesn't matter now, they all yield a near nothing 0.01%.
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retired@50
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by retired@50 »

dfin wrote: Sun Jun 13, 2021 8:45 am Regarding these three funds (VMFXX, VUSXX, VMMXX). Is it fair to say that your discussion on taxes centers on non-retirement accounts? YES Retirement withdrawals are treating as income regardless of the funds above, correct? YES
Yes, to both the questions you pose above.

Zombie thread alert, for anyone else coming along.

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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Munir »

Resurrecting an old thread, I have a question. The old Prime Reserve MMF (VMMXX) does not exist anymore and has been replaced by VMRXX which is a government money market fund. The redemption and liquidity risks ascribed to the old MM Prime fund (VMMXX) do not apply to VMRXX. Is this correct?
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Electron »

Munir wrote: Thu Nov 10, 2022 3:57 pm Resurrecting an old thread, I have a question. The old Prime Reserve MMF (VMMXX) does not exist anymore and has been replaced by VMRXX which is a government money market fund. The redemption and liquidity risks ascribed to the old MM Prime fund (VMMXX) do not apply to VMRXX. Is this correct?
This link should answer your question.

https://investor.vanguard.com/investor- ... und-lineup

"Vanguard Cash Reserves Federal Money Market Fund is designated as a government money market fund, which is expected to reduce the fund’s credit risk and strengthen its liquidity."

"A government money market fund must hold at least 99.5% of its assets in cash, U.S. government securities, and/or repurchase agreements collateralized solely by U.S. government securities or cash. By contrast, a retail prime money market fund may invest heavily in certain securities issued by companies—most commonly, commercial paper—as well as securities issued by the U.S. government and other money market securities."

"With these changes, Vanguard seeks to continue to deliver a money market fund with yields highly competitive to prime money market fund yields, while providing the safety and security of a portfolio of government securities. Our formula is as simple as it has been successful: prudent management and low costs."

Here is the Vanguard Fund Profile for VMRXX. Take note of the section labeled Liquidity Assets.

https://advisors.vanguard.com/investmen ... ral-shares

Lastly, you may want to review Vanguard's information on Money Market Reform. Click on the terms with the bright blue coloring.

https://investor.vanguard.com/investor- ... ket-reform
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Munir »

Electron, thank you.
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Carno »

I can buy VMRXX (min. $3K) and VMMXX (min. $1) at Etrade, but for some reason I cannot Exchange my existing VMFXX to VMRXX (can Exchange to VMMXX). Basically, VMRXX is not in the list for exchange but VMMXX is). Any reason why this is?
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Van »

How about a Forum rule that ticker symbols are ok in the title as long as the funds are spelled out in the text? I'm pretty sure this has probably been suggested before.
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by RubyTuesday »

Carno wrote: Tue Sep 12, 2023 3:47 am I can buy VMRXX (min. $3K) and VMMXX (min. $1) at Etrade, but for some reason I cannot Exchange my existing VMFXX to VMRXX (can Exchange to VMMXX). Basically, VMRXX is not in the list for exchange but VMMXX is). Any reason why this is?
Is there any reason you can’t sell VMFXX and then buy VRMXX? Do you need to use “exchange”?
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Carno »

RubyTuesday wrote: Tue Sep 12, 2023 6:04 am
Carno wrote: Tue Sep 12, 2023 3:47 am I can buy VMRXX (min. $3K) and VMMXX (min. $1) at Etrade, but for some reason I cannot Exchange my existing VMFXX to VMRXX (can Exchange to VMMXX). Basically, VMRXX is not in the list for exchange but VMMXX is). Any reason why this is?
Is there any reason you can’t sell VMFXX and then buy VRMXX? Do you need to use “exchange”?
I guess Exchange and Buy&Sell are the same mechanism. I thought Exchange settlement dates would be more advantageous to manual Buy&Sell?
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Electron »

Carno wrote: Tue Sep 12, 2023 3:47 am I can buy VMRXX (min. $3K) and VMMXX (min. $1) at Etrade, but for some reason I cannot Exchange my existing VMFXX to VMRXX (can Exchange to VMMXX). Basically, VMRXX is not in the list for exchange but VMMXX is). Any reason why this is?
That is surprising because VMMXX was merged into VMRXX back in 2021. The new name is Vanguard Cash Reserves Federal Money Market Fund.

VMMXX was the former Vanguard Prime Money Market fund and I don't believe it is available for purchase at Vanguard.

https://investor.vanguard.com/investor- ... und-lineup
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Carno »

Electron wrote: Tue Sep 12, 2023 1:38 pm
Carno wrote: Tue Sep 12, 2023 3:47 am I can buy VMRXX (min. $3K) and VMMXX (min. $1) at Etrade, but for some reason I cannot Exchange my existing VMFXX to VMRXX (can Exchange to VMMXX). Basically, VMRXX is not in the list for exchange but VMMXX is). Any reason why this is?
That is surprising because VMMXX was merged into VMRXX back in 2021. The new name is Vanguard Cash Reserves Federal Money Market Fund.

VMMXX was the former Vanguard Prime Money Market fund and I don't believe it is available for purchase at Vanguard.

https://investor.vanguard.com/investor- ... und-lineup
I can enter both symbols to buy at Etrade and VMRXX shows as "Vanguard Cash Reserves Federal Money Market Fund Admiral Shares" and VMMXX just as Vanguard Cash Reserves Federal Money Market Fund. However, VMMXX is on the Exchange dropdown list but VMRXX is not.
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Electron »

Carno wrote: Tue Sep 12, 2023 1:46 pmI can enter both symbols to buy at Etrade and VMRXX shows as "Vanguard Cash Reserves Federal Money Market Fund Admiral Shares" and VMMXX just as Vanguard Cash Reserves Federal Money Market Fund. However, VMMXX is on the Exchange dropdown list but VMRXX is not.
That may be an issue with Admiral shares which I've heard may not be available from brokerages outside of Vanguard.
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Carno »

Electron wrote: Tue Sep 12, 2023 1:57 pm
Carno wrote: Tue Sep 12, 2023 1:46 pmI can enter both symbols to buy at Etrade and VMRXX shows as "Vanguard Cash Reserves Federal Money Market Fund Admiral Shares" and VMMXX just as Vanguard Cash Reserves Federal Money Market Fund. However, VMMXX is on the Exchange dropdown list but VMRXX is not.
That may be an issue with Admiral shares which I've heard may not be available from brokerages outside of Vanguard.
I have tested to buy but have not yet pressed the Submit button (the last step to execute buy). I plan to buy VMRXX (min. $3K) this week.
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Carno »

Electron wrote: Tue Sep 12, 2023 1:38 pm
Carno wrote: Tue Sep 12, 2023 3:47 am I can buy VMRXX (min. $3K) and VMMXX (min. $1) at Etrade, but for some reason I cannot Exchange my existing VMFXX to VMRXX (can Exchange to VMMXX). Basically, VMRXX is not in the list for exchange but VMMXX is). Any reason why this is?
That is surprising because VMMXX was merged into VMRXX back in 2021. The new name is Vanguard Cash Reserves Federal Money Market Fund.

VMMXX was the former Vanguard Prime Money Market fund and I don't believe it is available for purchase at Vanguard.

https://investor.vanguard.com/investor- ... und-lineup
Today, I was able to by $3,000 of VMRXX at Etrade (no issues other than the min. $3K requirement).
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Re: Risk comparison: VMMXX vs VMFXX vs VUSXX?

Post by Electron »

Today, I was able to by $3,000 of VMRXX at Etrade (no issues other than the min. $3K requirement).
Glad to hear that the purchase went through. There have been a number of threads about Vanguard Admiral Shares being available at other brokerages.

viewtopic.php?t=303078

viewtopic.php?t=354913

It sounds as though ETrade has access to more Vanguard funds than some of the other brokerages. However, not all Admiral share funds were available when these threads were active. It may have helped that VMRXX is a Money Market fund.
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