Vanguard offers several money market funds, each with slightly different characteristics. Here’s a summary of their key features:
General Features:
- Investment Objective: Provide current income while maintaining liquidity and a stable share price of $1.
- Minimum Investment: $3,000
- Expense Ratio: 0.10% or lower
- Liquidity: Highly liquid, allowing for easy access to your money without penalty in most cases.
- SIPC Coverage: Up to $500,000 for securities held in your Vanguard Brokerage Account.
Available Money Market Funds:
- VMFXX – Vanguard Federal Money Market Fund: Invests primarily in U.S. government securities and repurchase agreements with government collateral. It’s considered the most conservative option.
- VMUSX – Vanguard Municipal Money Market Fund: Invests in short-term, tax-exempt debt issued by U.S. municipalities and their agencies. Offers tax-exempt income for qualified investors.
- VMMXX – Vanguard Prime Money Market Fund: Invests in a broader range of high-quality, short-term securities, including U.S. government and corporate bonds. May offer slightly higher yields than VMFXX, but with slightly more risk.
- VMRXX – Vanguard Admiral Money Market Fund: Similar to VMMXX, but requires a higher minimum investment ($10,000) and offers a lower expense ratio due to its larger size.
Additional Information:
- You can find complete information on each fund, including its investment objective, holdings, performance, and fees, on the Vanguard website: https://investor.vanguard.com/investment-products/money-markets
- Money market funds are generally suitable for short-term savings goals or emergency funds.
- While they offer higher yields than traditional savings accounts, they may not keep pace with inflation.
- Consider your investment goals, risk tolerance, and time horizon before choosing a money market fund.
It’s important to remember that I am not a financial advisor and this is not financial advice. Please consult with a professional before making any investment decisions.
I hope this information is helpful! Let me know if you have any other questions.