Vanguard Municipal Money Market VMSXX [0.03%]

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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by gmaynardkrebs »

anon_investor wrote: Sat May 21, 2022 12:22 pm
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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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Kevin M »

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.
Not really the same thing, are they?

Image

Apples to oranges comparison?

Not saying you shouldn't use the fund, just that it's not a cash equivalent, which the money market funds are.

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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by LadyGeek »

The discussion is getting derailed on TIPS.

Please stay on-topic, which is the Vanguard money market.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by gmaynardkrebs »

Kevin M wrote: Sat May 21, 2022 1:54 pm
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.
Not really the same thing, are they?

Image

Apples to oranges comparison?

Not saying you shouldn't use the fund, just that it's not a cash equivalent, which the money market funds are.

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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Electron »

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.
Some of the cyclical peaks are related to issuance of new municipal bonds. The calendar dates often repeat from year to year.

Municipal bond yields can also rise during periods of market stress as we have seen recently and in 2020.

The VIX index closed at 29.43 on Friday. This index is also known as the Fear Index.

The yield on Municipal VRDOs might drop to some degree if the VIX returns to more normal levels below 20.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Kookaburra »

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.
Comparing VMSXX or HYSA to TIPS is apples-to-oranges. The former provides liquidity without risk of principal loss due to changes in interest rates.

But I am trying to learn more about TIPS (individual, not funds) to see if they might be right for me. What is the shortest duration individual TIPS one can purchase at auction?
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Kevin M »

Kookaburra wrote: Sun May 22, 2022 12:29 pm But I am trying to learn more about TIPS (individual, not funds) to see if they might be right for me. What is the shortest duration individual TIPS one can purchase at auction?
I would love to anwer your questions about TIPS, but not in this thread. You can start your own thread, or post in one of the existing ones.
LadyGeek wrote: Sat May 21, 2022 2:37 pm The discussion is getting derailed on TIPS.

Please stay on-topic, which is the Vanguard money market.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Kevin M »

Looks like the Vanguard muni MM funds have peaked for this cycle:

Image

VMSXX SEC yield held steady at 0.68% for 4 days, and today dropped to 0.66%. Similarly, CA muni MM (VCTXX) held steady at 0.62% for 4 days, and today dropped to 0.61%.

There are discussions of the cyclical nature of muni MM fund yields in earlier pages in this thread.

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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Electron »

Here is a chart updated through June 3. The Municipal Money Market Funds peaked around May 25.

The drop so far is quite significant.

It will be interesting to see where the SEC yields go from here! :happy

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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Kookaburra »

Electron wrote: Sun Jun 05, 2022 2:15 pm Here is a chart updated through June 3. The Municipal Money Market Funds peaked around May 25.

The drop so far is quite significant.

It will be interesting to see where the SEC yields go from here! :happy

Image
It’s hard to tell which line each ticker applies to. Could you add a legend at the bottom?
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Electron »

Chart Legend

Blue - Treasury VUSXX
Purple - Federal VMFXX
Green - Municipal VMSXX
Yellow - California VCTXX
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by neurosphere »

Electron wrote: Sun Jun 05, 2022 2:15 pm Here is a chart updated through June 3. The Municipal Money Market Funds peaked around May 25.

The drop so far is quite significant.

It will be interesting to see where the SEC yields go from here! :happy
As of June 13, still going up as expected [edit: meaning the yields on money market funds in general], and the muni funds have turned the corner! Wish I were more adept (read: I'm lazy) at posting images or I would do so. :D
Last edited by neurosphere on Tue Jun 14, 2022 8:27 am, edited 1 time in total.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Tom_T »

As of June 13:

Federal VMFXX: 0.75
Treasury VUSXX: 0.81
Muni VMSXX: 0.50
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Electron »

Last week I moved most of my assets in the Municipal Money Market fund to the Treasury Money Market fund. The relative yields hit the crossover point for my tax brackets.

The yield on the Treasury Money Market fund has been rising noticeably almost every day. The yield on VMSXX declined after the peak around May 25 but has now leveled off.

They say there is always a bull market somewhere. It looks like that applies to Money Market funds at the present time. :happy
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by patrick »

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.
But still far from the best HYSAs. Bask Bank now pays 1.5%.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Kevin M »

patrick wrote: Tue Jun 14, 2022 2:09 pm
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.
But still far from the best HYSAs. Bask Bank now pays 1.5%.
Slightly off topic, but I see 1.530% for Treasury maturing 8/23/2022 (2.3-month). That would be even higher TEY in a taxable account that pays state income tax.

Even more off topic, today I got 1.514% net yield on a 30-day box spread, which at the time was 38 basis points higher than the Treasury yield for same maturity. Oh, and I bought this in a taxable account, so the net taxable-equivalent yield (TEY) is 1.606%.

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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Tom_T »

VMFXX at 0.84%
VUSXX at 0.87%
VMSXX at 0.55%
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Electron »

Here is the latest chart updated through 6-24-22.

The taxable money market funds are the place to be for most of us at the present time.

The next Fed meeting is July 26-27. Fed meetings are also scheduled for September 20-21, November 1-2, and December 13-14.

We'll have to keep an eye on the yields as the relationships are changing all the time.

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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by anon_investor »

Electron wrote: Sat Jun 25, 2022 5:48 pm Here is the latest chart updated through 6-24-22.

The taxable money market funds are the place to be for most of us at the present time.

The next Fed meeting is July 26-27. Fed meetings are also scheduled for September 20-21, November 1-2, and December 13-14.

We'll have to keep an eye on the yields as the relationships are changing all the time.

Image
Wow look at VMFXX go!
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by retiringwhen »

i have been tracking VMRXX as well, and can't see any reason to own that fund over VMFXX, it has tracked slightly lower and moves almost exactly in step.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by anon_investor »

retiringwhen wrote: Sat Jun 25, 2022 5:51 pm i have been tracking VMRXX as well, and can't see any reason to own that fund over VMFXX, it has tracked slightly lower and moves almost exactly in step.
I am not even sure why Vanguard has that fund. It is not the "Prime" money market fund that used to exist. They should just combine it with VMFXX.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Electron »

anon_investor wrote: Sat Jun 25, 2022 7:16 pmI am not even sure why Vanguard has that fund. It is not the "Prime" money market fund that used to exist. They should just combine it with VMFXX.
Vanguard Prime Money Market Fund - Admiral Shares became Cash Reserves Federal Money Market Fund. Both funds used Vanguard fund number 66. The Admiral Shares previously required an initial investment of $5 million.

It's possible they retained the fund so that brokerage account customers could invest in a similar money market fund separate from the settlement fund. Vanguard Federal Money Market and Cash Reserves Federal Money Market do seem to track very closely. One issue with both funds is that the amount of any state tax exemption is not known until the end of the year. Cash Reserves is currently showing 43.8% in Repurchase Agreements versus 58.5% for Federal Money Market. If a lower percentage is maintained all year in Cash Reserves fund that should result in a larger state tax exemption.

My first Money Market fund was Value Line Cash Fund in 1981. I think money market fund yields peaked close to 18%. My first IRA investment was a CD from Bank of America paying 16.5%. I also held Kemper Money Market fund for a number of years.

An even better IRA investment at that time would have been a 30 year Treasury bond. The 30 year rate in 1981 peaked at 15.21%. High rates could have been locked in for a full 30 years. That was close to the start of the 1982 bull market and stock returns were very high as well.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by anon_investor »

Electron wrote: Sun Jun 26, 2022 2:33 pm
anon_investor wrote: Sat Jun 25, 2022 7:16 pmI am not even sure why Vanguard has that fund. It is not the "Prime" money market fund that used to exist. They should just combine it with VMFXX.
Vanguard Prime Money Market Fund - Admiral Shares became Cash Reserves Federal Money Market Fund. Both funds used Vanguard fund number 66. The Admiral Shares previously required an initial investment of $5 million.

It's possible they retained the fund so that brokerage account customers could invest in a similar money market fund separate from the settlement fund. Vanguard Federal Money Market and Cash Reserves Federal Money Market do seem to track very closely. One issue with both funds is that the amount of any state tax exemption is not known until the end of the year. Cash Reserves is currently showing 43.8% in Repurchase Agreements versus 58.5% for Federal Money Market. If a lower percentage is maintained all year in Cash Reserves fund that should result in a larger state tax exemption.

My first Money Market fund was Value Line Cash Fund in 1981. I think money market fund yields peaked close to 18%. My first IRA investment was a CD from Bank of America paying 16.5%. I also held Kemper Money Market fund for a number of years.

An even better IRA investment at that time would have been a 30 year Treasury bond. The 30 year rate in 1981 peaked at 15.21%. High rates could have been locked in for a full 30 years. That was close to the start of the 1982 bull market and stock returns were very high as well.
Did the S&P500 beat the 30 year treasury over that time period?
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Electron »

anon_investor wrote: Sun Jun 26, 2022 2:52 pm Did the S&P500 beat the 30 year treasury over that time period?
If my calculations are correct, Vanguard 500 Index Fund had an annual return of about 10.8% for the 30 year period starting in late September 1981. Data was taken from a Morningstar Total Return chart.

A 30 year Treasury bond could have been purchased in late September 1981 with a coupon yield in the area of 14-15%. Total return would have been less with the coupons reinvested at lower rates. Even so, the Treasury bond would have been a great investment. If available, a 30 year zero coupon bond would have been even better.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by anon_investor »

Electron wrote: Mon Jun 27, 2022 1:28 pm
anon_investor wrote: Sun Jun 26, 2022 2:52 pm Did the S&P500 beat the 30 year treasury over that time period?
If my calculations are correct, Vanguard 500 Index Fund had an annual return of about 10.8% for the 30 year period starting in late September 1981. Data was taken from a Morningstar Total Return chart.

A 30 year Treasury bond could have been purchased in late September 1981 with a coupon yield in the area of 14-15%. Total return would have been less with the coupons reinvested at lower rates. Even so, the Treasury bond would have been a great investment. If available, a 30 year zero coupon bond would have been even better.
I guess it gets more complicated too, since in a taxable account the 30 year treasury bond would have much more tax drag.

But for a "risk free" investment, that is crazy!
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Electron »

Here is a chart updated through 8-05-22.

Note the recent rise in the Tax Exempt Money Market Fund yields.

These funds could present an opportunity very soon.

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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by am »

Electron wrote: Sat Aug 06, 2022 1:09 pm Here is a chart updated through 8-05-22.

Note the recent rise in the Tax Exempt Money Market Fund yields.

These funds could present an opportunity very soon.

Image
Vmsxx muni money market 7 day yield 1.44 as of 8/5. That’s real good compared to high yield savings for those who are in higher brackets.

I remember from years before that these yields never lasted. But now with fed raising interest rates, I am thinking of transferring most of my money in high yield to this muni fund. What do you guys think?
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Bimmer »

My high yield savings accounts are all around 1.6%, so better than VMSXX. But by my maths FederalMoney Market has a TEY > 2% in higher tax bracket, so I’m keeping most cash there right now.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by am »

Bimmer wrote: Sun Aug 07, 2022 9:32 am My high yield savings accounts are all around 1.6%, so better than VMSXX. But by my maths FederalMoney Market has a TEY > 2% in higher tax bracket, so I’m keeping most cash there right now.
1.6% is much worse in high yield compared to 1.4% in muni at high bracket
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Trance »

How much do you guys hold in money market funds? My credit union has a reverse money market fund that gives 2.75% for up to $5000 and a 2.5% apy for up to $15,000 in my checking.

Should I hold more than $20,000 in rainy day fund?
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by retired@50 »

Trance wrote: Sun Aug 07, 2022 11:23 am How much do you guys hold in money market funds? My credit union has a reverse money market fund that gives 2.75% for up to $5000 and a 2.5% apy for up to $15,000 in my checking.

Should I hold more than $20,000 in rainy day fund?
How much cash to hold?

It depends on a variety of personal factors, not really so much on what other people do.
How secure is your job?
How long can you live off of your emergency fund?
How long do you estimate it would take to find a new job if you were to lose your current job?
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A rule of thumb is to hold 3 to 6 months of living expenses in cash. You can adjust this number up or down based on your own personal circumstances.

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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Electron »

am wrote: Sun Aug 07, 2022 7:12 am Vmsxx muni money market 7 day yield 1.44 as of 8/5. That’s real good compared to high yield savings for those who are in higher brackets.

I remember from years before that these yields never lasted. But now with fed raising interest rates, I am thinking of transferring most of my money in high yield to this muni fund. What do you guys think?
The yield on VMSXX is now up to 1.48%. Yields on all the Money Market funds have been changing daily as securities mature and are replaced with higher yields. The Money Markets also seem to discount Federal Reserve rate hikes in advance.

All we can do is monitor the yields on these funds. VMFXX and VMRXX currently have the highest Money Market fund yields at Vanguard. Unfortunately, the state tax exemption percentage will not be known until early next year. VMRXX has been maintaining a higher percentage in U.S. Government obligations.

In my tax bracket, VMSXX now has a higher after-tax yield when compared with VUSXX. I prefer the Treasury Money Market fund over VMFXX and VMRXX for two reasons. The yield catches up with VMFXX and VMRXX after a short time and the state tax exemption is not an issue.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by CAMD »

A bit of a naive question here. What is the tax implications for these options? Specifically for the highest tax bracket in CA. I am aware that the CA Muni are tax exempt for both state and Federal. But with the difference in rates, even with tax, some of the other options may make more sense, correct?
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Kevin M »

CAMD wrote: Tue Aug 09, 2022 3:51 pm A bit of a naive question here. What is the tax implications for these options? Specifically for the highest tax bracket in CA. I am aware that the CA Muni are tax exempt for both state and Federal. But with the difference in rates, even with tax, some of the other options may make more sense, correct?
Correct, especially since the muni MM fund yields are cyclical, so may be attractive to certain investors with certain marginal tax rates for a few weeks, and then fall back to a lower taxable-equivalent yield compared to other MM funds. For the highest CA marginal tax rate, the CA muni fund is likely to be attractive more often.

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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by zzz »

The 7 day SEC yield for VMSXX seemed to jump from 1.38% to 1.64% in a day. Is that unusual? Suddenly it seems better than the US Treasury Money Market fund.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by retiringwhen »

zzz wrote: Sat Sep 24, 2022 7:53 am The 7 day SEC yield for VMSXX seemed to jump from 1.38% to 1.64% in a day. Is that unusual? Suddenly it seems better than the US Treasury Money Market fund.
When the Fed raises interest rates at the overnight rate by 75bps, rates on money markets jump real fast, so yes this is expected for all money market funds. Rates are jumping in VUSXX, VMFXX and VMRXX right now too.

On top of that, the Muni funds tend to be cyclical around quarter ends and some other phases of the moon :P

Depending upon your marginal tax rates, this may be a good time to move to the muni fund for a short while. Here is link to a graphical chart/spreadsheet that updates daily that shows the best fund based on the current SEC Yield:

Vanguard Money Market Yield Analysis
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by zzz »

Thanks, I was expecting all the Money Market Funds to react similarly to the Fed increase and wondered why VMSXX reacted so much more. Thanks for clearing this up. Sounds like from what you're saying I'll be back in the Treasury after "a short while".
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by retiringwhen »

zzz wrote: Sat Sep 24, 2022 9:08 am Thanks, I was expecting all the Money Market Funds to react similarly to the Fed increase and wondered why VMSXX reacted so much more. Thanks for clearing this up. Sounds like from what you're saying I'll be back in the Treasury after "a short while".
Unless you are in the highest tax brackets, yes.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Kevin M »

VMFXX and VMRXX jump after each fed funds rate increase, while VUSXX increases more gradually.

Image

The thinking is that the first two hold repurchase agreements, for which the rate changes quickly (daily?), while VUSXX holds only Treasuries.

This time though VUSXX got ahead before the rate hike, so now is only 6 basis points lower than VMFXX. In taxable with state income tax, VUSXX taxable-equivalent yield could be higher, and the state tax deduction for VMFXX and VMRXX is uncertain.

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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Bimmer »

So, I started this thread in 2018, and I learned that there are lots of factors that go into these money market rates, and there is significant cyclic variation. When MM rates went down, I moved money out to high yield online savings accounts. Now I'm considering swinging the money back.

My question today is what is expected to happen to these money market rates in this rising rate environment? Should we expect Vanguard MM rates to be above high yield savings accounts for the near future?

Some current rate information for comparison:
-- Vanguard Federal MM - 7 day SEC yield 2.77% (3.22% for my tax bracket)
-- Vanguard Municipal MM - 7 day SEC yield 2.18% (3.54% for my tax bracket)
-- Dollar Savings Direct - 3%
-- Synchrony Online Savings - 2.25%
-- Ally Online Savings - 2.10%
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Kevin M »

Bimmer wrote: Mon Oct 03, 2022 8:45 pm So, I started this thread in 2018, and I learned that there are lots of factors that go into these money market rates, and there is significant cyclic variation. When MM rates went down, I moved money out to high yield online savings accounts. Now I'm considering swinging the money back.

My question today is what is expected to happen to these money market rates in this rising rate environment? Should we expect Vanguard MM rates to be above high yield savings accounts for the near future?

Some current rate information for comparison:
-- Vanguard Federal MM - 7 day SEC yield 2.77% (3.22% for my tax bracket)
-- Vanguard Municipal MM - 7 day SEC yield 2.18% (3.54% for my tax bracket)
-- Dollar Savings Direct - 3%
-- Synchrony Online Savings - 2.25%
-- Ally Online Savings - 2.10%
The money market rates will continue to rise as long as the 1m to 3m Treasury yields continue to rise, and they will continue to rise as long as there are more Fed rate hikes expected. Whether or not they stay ahead of HYSAs is up to the banks and credit unions. It's easy enough to transfer from one to the other to take advantage of higher yields if the difference is significant to you.

The TEY of Fed MM is unknown, since we don't know what the percentage of USGO income will be for 2022, and whether it it will qualify for any state income tax exemption in CA and a couple of other states that have additional requirements.

Kevin
If I make a calculation error, #Cruncher probably will let me know.
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Bimmer
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Bimmer »

Thanks Kevin. I've always wondered about the TEY yield for Federal. 2.77% is still good, but Muni MM seems significantly better, at least for the moment.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by zero_coupon »

Kevin M wrote: Sun Apr 12, 2020 7:54 pm
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.

Kevin
Considering Fidelity's premium version, FZEXX, do you consider these funds (VMSXX, FZEXX) mostly equivalent in terms of risk? It appears that FZEXX generally yields 10-20 basis points less.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Electron »

zero_coupon wrote: Tue Dec 06, 2022 5:29 am Considering Fidelity's premium version, FZEXX, do you consider these funds (VMSXX, FZEXX) mostly equivalent in terms of risk? It appears that FZEXX generally yields 10-20 basis points less.
It might be worth comparing the fund profiles of the two funds. Here is the information for VMSXX.

https://advisors.vanguard.com/investmen ... d#overview

Take a look at the expense ratios and average maturities. VMSXX is currently showing 0.15% for the expense ratio. Average maturity is shown as 8 days and the weighted average life is 9 days.

The quality of the portfolio holdings would be another factor but that information does not seem to be provided.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by zero_coupon »

Electron wrote: Mon Dec 12, 2022 4:24 pm
zero_coupon wrote: Tue Dec 06, 2022 5:29 am Considering Fidelity's premium version, FZEXX, do you consider these funds (VMSXX, FZEXX) mostly equivalent in terms of risk? It appears that FZEXX generally yields 10-20 basis points less.
It might be worth comparing the fund profiles of the two funds. Here is the information for VMSXX.

https://advisors.vanguard.com/investmen ... d#overview

Take a look at the expense ratios and average maturities. VMSXX is currently showing 0.15% for the expense ratio. Average maturity is shown as 8 days and the weighted average life is 9 days.

The quality of the portfolio holdings would be another factor but that information does not seem to be provided.
That's a good starting point, thanks. Perhaps others have insight as well.
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Re: Vanguard Municipal Money Market VMSXX 1.39%

Post by Electron »

zero_coupon wrote: Tue Dec 13, 2022 11:11 pmThat's a good starting point, thanks. Perhaps others have insight as well.
The expense ratio on FZEXX is 0.30% versus 0.15% with VMSXX. That probably explains most of the difference in yield.

If safety is your primary concern, Treasury Bills or Vanguard Treasury Money Market fund VUSXX are probably safer choices. The tax-exempt money market funds have never traded below $1.00 NAV to my knowledge but they do invest in derivative securities based on long term municipal bonds.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Startled Cat »

I check the one-day yields for FSPXX (Fidelity California Municipal Money Market Fund) occasionally, and did a double take today when I saw 2.93% (7 day yield is 1.92%). Is the next upswing here with a bang, or is this daily yield just an outlier?
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by whoMe »

Startled Cat wrote: Fri Feb 10, 2023 8:45 am I check the one-day yields for FSPXX (Fidelity California Municipal Money Market Fund) occasionally, and did a double take today when I saw 2.93% (7 day yield is 1.92%). Is the next upswing here with a bang, or is this daily yield just an outlier?
Yes, the muni yields have been surging.

For my example and using yesterday's published SEC yields, my TEY for the NY muni fund was only 80 bps below the TEY for the treasury fund. I'm guessing the muni TEY will overtake the treasury TEY for the SEC yields that will be published today because the muni yields have been increasing so fast and the fact that it seems Vanguard computes the 7-day SEC yields on Fridays as the 7 day average from Mon-Sun (and the yield on the weekend is the same as the yield on the previous Friday) so SEC yields seem to jump on Fridays (and the day before holidays).

Here is my chart for my TEY based on the published SEC yields:
Image

In case anyone is interested, here is after adjusting the dates of the published SEC yields on Fridays and the day before holidays:
Image
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by preach »

Startled Cat wrote: Fri Feb 10, 2023 8:45 am I check the one-day yields for FSPXX (Fidelity California Municipal Money Market Fund) occasionally, and did a double take today when I saw 2.93% (7 day yield is 1.92%). Is the next upswing here with a bang, or is this daily yield just an outlier?
Yep. Municipal MMF indexes are already closing in on 4% that were 1.8% just a few days ago. This swing upward is going to be even harder than the drop downward from a couple months ago.
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Re: Vanguard Municipal Money Market VMSXX [0.03%]

Post by Electron »

Startled Cat wrote: Fri Feb 10, 2023 8:45 am I check the one-day yields for FSPXX (Fidelity California Municipal Money Market Fund) occasionally, and did a double take today when I saw 2.93% (7 day yield is 1.92%). Is the next upswing here with a bang, or is this daily yield just an outlier?
The SIFMA Municipal Swap Index rose sharply this week to 3.74%. It is updated every Wednesday.

The yield shown is generally an upper limit for the yields seen in the Municipal Money Market funds.

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

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

Here is an article from Schwab with information on Municipal Money Market fund yields that is worth reading. The section on Seasonality explains the reasons for the cyclical pattern that we have seen.

https://www.schwabassetmanagement.com/c ... ket-yields
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