I currently hold VBTLX (Vanguard Total Bond Market Index Fund Admiral Shares) in my retirement accounts, which has a 30 day SEC yield of 4.1%. On the other hand, VMRXX (Vanguard Cash Reserves Federal Money Market Fund Admiral Shares) has a 30 day SEC yield of 5.05%.
What are the benefits of continuing to hold VBTLX versus VMRXX? Or should I look to transition to VMRXX at least in the short term?
Bond fund vs money market fund in retirement accounts
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- inittowinit
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Re: Bond fund vs money market fund in retirement accounts
Their durations are completely different. Money market rates can change on a dime. Bond rates are more…durable.
- ruralavalon
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Re: Bond fund vs money market fund in retirement accounts
For long-term investing in retirement accounts an intermediate effective duration like 6.56 years Vanguard Total Bond Market Index Fund (VBTLX) will likely produce a higher total return.mahgeetah01 wrote: ↑Sun May 28, 2023 12:30 pm I currently hold VBTLX (Vanguard Total Bond Market Index Fund Admiral Shares) in my retirement accounts, which has a 30 day SEC yield of 4.1%. On the other hand, VMRXX (Vanguard Cash Reserves Federal Money Market Fund Admiral Shares) has a 30 day SEC yield of 5.05%.
What are the benefits of continuing to hold VBTLX versus VMRXX? Or should I look to transition to VMRXX at least in the short term?
Don't make changes based on the short-term.
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