Vanguard Money Market Funds


Introduction

Vanguard money market funds provide some financial services that can enable investors to invest cash equivalent items. These cash equivalent items are actually low return investments like short-term (less than one year) securities. These items bear low risks. Investors can find this as a safe place for investment. Vanguard money market funds aim to acquire interest for shareholders. People who need to earn interest on long term basis, like those who are within their retirement plans, should not opt for this option.

Investment policies and strategies of Vanguard money market funds

One of the prime targets under the investment strategies of Vanguard money market fund is to invest in superior quality, short-term money market instruments like security, commodity, certificates of deposit(CD), commercial paper etc. Superiority of securities should be determined in terms of ratings assessed by some nationally acknowledged services. One of the other strategies of the Vanguard money market funds is to invest more than 25% of its assets in company issued securities.

Some of the prime investment policies of Vanguard money market funds are:

  • Vanguard holds the right to invest in repurchase agreements on a particular date and time.
  • Vanguard also holds the right to invest to floating-rate securities
Striking features

Some prominent features of Vanguard money market funds are as follows:

Distributions, minimums and fees, holdings, investment criteria, management, account options, risk properties, performance, price history

Fees and Minimums

The initial minimum for general account is $3,000 and additional investment is $100
The initial minimum for IRA is $3,000 and additional investment is $100
The initial minimum for education savings Account is $2,000 and the additional investment is $100

Fees: The investors who have a balance under $10,000 in their account, need to give service charge of $20 as annual account service fee. Investors can eliminate this service charge, if they register for account access on Vanguard.com.

Advice by economists

The investors, who are trying to obtain interest on their income and want to maintain a stable share price should opt for investing in Vanguard money market funds. The investors who desire to maintain the liquidity, can also go for this Vangurad money market funds.

Investors who would like to obtain a long term capital growth, should not go for this option.

Account Options

Vanguard money market funds provide some account facilities including automatic exchange service account, special purpose account, telephone redemption individual account, telephone exchange retirement account etc. These varieties of accounts enable the investors to simplify their finances and meet their financial needs.

  • Telephone redemption individual accounts: This account sell the shares from the investor’s Vanguard non retirement account.
  • Automatic exchange service account: Investors can shift their money from one of their Vanguard money market fund account to the another.
  • Special purchase account: This account enables the investors to periodically shift money from their bank account to make purchase additional shares of their non retirement Vanguard money market fund account.

Vanguard money market funds are of several types. These are as follows:

Vanguard Treasury Money Market Fund, Vanguard Tax-Exempt Money Market Fund, Vanguard Federal Money Market Fund,Vanguard Prime Money Market Fund. They differ with each other by the factors like yield, expense ratio, total net assets etc.

About EconomyWatch PRO INVESTOR

The core Content Team our economy, industry, investing and personal finance reference articles.