Vanguard reopens Federal Money Market Fund (VMFXX)

[KevinW]

Due to some SEC mumbo-jumbo, Vanguard is reopening its Federal Money Market Fund (VMFXX) and making it more PP-friendly:
https://personal.vanguard.com/us/insigh ... ent-062015

The fund...

will be required to hold 99.5% (up from 80%) of assets in cash, government securities, and/or repurchase agreements that are collateralized solely by government securities or cash.

The 99.5% figure is better than most other PP cash alternatives. From an orthodox PP perspective, it would be better if "government securities, and/or repurchase agreements" were instead "Treasury securities" full stop. But still, this fund is now among the best for the cash component of an orthodox PP.

It's certainly better than Vanguard Prime Money Market, which has been Vanguard's sole available settlement fund for several years.

[AdamA]

Although not a money market fund, I think VFISX is better.  It's almost purely US treasuries, just of slightly longer duration, so subject to a little bit of interest rate risk. 

[dualstow]

I got an email last week saying,

Later in 2016, all brokerage clients will be required to use Vanguard Federal Money Market Fund as their money market settlement fund.

I've been using a state tax-exempt money market fund as my sweep. It's mentioned in Kevin's linked notice, but only under a definition of "retail" vs "institutional." Hmm.

[BearBones]

Treasury MM fund open now too. But need 50k.
https://personal.vanguard.com/us/insigh ... TMM-012016

[Reub]

What are the advantages of a treasury MM fund?

[rickb]

What are the advantages of a treasury MM fund?

Safety.

The only scenarios where you can conceivably lose principal are fraud on the part of the fund manager (which is a risk any fund has) and default by the US (which is at least classically unthinkable).

[dualstow]

Treasury MM fund open now too. But need 50k.
https://personal.vanguard.com/us/insigh ... TMM-012016

I have less than 10K in there, but I guess it was grandfathered in. I never sold completely out of it when they closed it to new investors.