Author Topic: Compare these two money market funds  (Read 871 times)

Captain Cactus

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Compare these two money market funds
« on: January 10, 2018, 06:58:38 PM »
Vanguard has two money market funds:
 
1)  VMMXX:  1.41% yield, 0.16% expense ratio.
2)  VMFXX:  1.24% yield, 0.11 expense ratio (this is the default settlement fund).

I've got about $120K that I'm primarily earmarking for a real estate investment in less than 18-24 months.

Questions:
1)  Any reason why I shouldn't put my dry powder into the higher yielding MM fund?
2)  Are there better options out there that I'm missing?

Thank you MMM community! 

phil22

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Re: Compare these two money market funds
« Reply #1 on: January 10, 2018, 08:02:10 PM »
i'm in a similar situation and have cash parked in VMFXX.  no particular reason.  for the questions:

1) none i can think of
2) now that those money market funds actually generate a trickle of returns, i think they'd be easier to manage than CDs, for example.  i don't care about missing out on a couple hundred dollars' worth of potential returns so simpler is better.

Captain Cactus

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Re: Compare these two money market funds
« Reply #2 on: January 11, 2018, 05:37:14 AM »
Thanks for reply.  I agree.  If anybody else has input, please speak up!

L.A.S.

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Re: Compare these two money market funds
« Reply #3 on: January 11, 2018, 01:47:37 PM »
If I recall, VMMXX used to be the settlement fund.  But, I believe due to new SEC rules,  Vanguard was no longer allowed to be used as a settlement fund.

https://investor.vanguard.com/mutual-funds/money-market-reform/

So, they moved VMMXX to a non-settlement position in the portfolio and opened the new settlement fund/position for everyone.  I don't there's nothing wrong with investing in it at the higher rate though.



Frugancial Advisor

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Re: Compare these two money market funds
« Reply #4 on: January 14, 2018, 07:28:27 AM »
Where are you located?

If you have 18-24 months before you need the money, you should easily be able to get a guaranteed rate of 1.50% or more on a GIC/CD. That or do some HISA-Hopping: Find companies who offer high introductory savings account rates (i.e. 2.50%) for the first 3 months and when the period is up, hop to another firm offering a similar introductory rate!

Rocky Road

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Re: Compare these two money market funds
« Reply #5 on: January 17, 2018, 10:29:24 PM »
Can those MM Funds lose any capital? Capital One MM account is yielding 1.4% now ad FDIC insured.  Not familiar with the tickers you names sorry.  If FDIC insured, sounds good.