Leaving Vanguard ASAP

[jayc]

Tried to get out of a bond fund and it would not let me sell more than $10K. What kind of nickle and dime store is this? Not worth the trouble when you have these restrictions. What a waste of time going to this company.

 

[JBmadera]

really? I sure hope it is some kind of error, most of my funds are with them....better not let DW see this, she's already a wreck re: insider trading/expert networks, etc.

thanks for the heads up.

 

[LOL!]

Without a lot more details, ....

 

[kramer]

Vanguard has some frequent trading restrictions on their mutual funds -- this is to prevent market timing by constant buying and selling. Prevention of said action protects all the mutual fund owners. Is it possible this was the problem you ran into?

I believe that you can almost always (if not always) do a redemption by mail, as a workaround. An online workaround is that you can do a schedule redemption as soon as the next business day or maybe the following day.

Details about the policy and workarounds can be found here:

Frequent trading policy - Bogleheads

 

[chinaco]

Tried to get out of a bond fund and it would not let me sell more than $10K. What kind of nickle and dime store is this? Not worth the trouble when you have these restrictions. What a waste of time going to this company.

A little more detail about the situation please.

Did they say why it was restricted to $10k?

 

[RonBoyd]

Without a lot more details, ....

A whole lot more.

 

[rescueme]

Did they say why it was restricted to $10k?

That's all that was in the account?

Seriously, I traded (e.g. moved to another VG holding) more than that amout out of Total Bond on the 14th and had no problems at all...

 

[RonBoyd]

Were you asking that the funds be sent out of the country?

 

[travelover]

Is it bigger than a breadbox?

 

[Spanky]

The OP must be kidding or something! I have redeemed a lot more than $10K from a Vanguard bond fund lately.

 

[Bestwifeever]

I have moved money from a Vanguard fiund and been warned that we could not move $$ back into the fund for 90 days to discourage frequent trading (this was the only time I moved $$); the warning did not say we couldn't move more money out of the fund. Maybe that's what OP is talking about?

 

[freebird5825]

What bond fund was it? Most VG bond funds have check writing privileges, so you have options.

As Paul Harvey would so famously say..."And now...the rest of the story..."

Do tell.

 

[LOL!]

I'll guess OP sent a check to buy shares of the bond fund within the last 2 weeks. The shares were bought, but the check hasn't aged enough. I suspect they could sell the bond shares and put the proceeds into a Vanguard money market fund, but that they cannot move the money out of Vanguard until the check has aged enough.

I can imagine some other possibilities as well.

If you want to go to another company, I would recommend WellsFargo (search the forum why), but you might have the same problem at every vendor.

 

[donheff]

My guess is the OP sold $10K and was told his account would be restricted and he could not buy the same fund for 90 days. Something about the wording is confusing. I recently sold a fund and thought they were telling me I couldn't sell any more also. That sounded ridiculous so I reread carefully and realized they were talking about buying the same fund.

 

[chinaco]

Several months back I was moving out of large stock position. I wanted to move it to a money market fund that is closed to new investors until I could figure out where I wanted to reinvest the money. I have been in that money market fund for years... but because it was closed to new investors, they would only let me more $10k into it the money market fund. My only choices were to move it to another fund to was not restricted.

But the restriction was not my ability to close an account, but how much I could move (on a day) into an account that was closed to new investors.

 

[jayc]

A little more detail about the situation please.

Did they say why it was restricted to $10k?

I have owned this fund for 13 months in an IRA rollover acct. I was transferring all of VFIIX (GNMA) to their MM account. It said something about do to high volume of redemptions in this fund the max is $10K. I lowered my transfer to $10K and it took it.

 

[FIREd]

Uh-Oh, that little swoon in bond prices has people rushing for the exits!

 

[RonBoyd]

Uh-Oh, that little swoon in bond prices has people rushing for the exits!

With a little pushing and shoving from the media:

Experts agree: Get over your fear and get back into stocks

The major theme from USA TODAY's 15th annual Investment Roundtable is that the bond market is looking riskier amid signs the economy is gaining traction. The five panelists say stocks, which get a boost from stronger growth, will post better returns than bonds in 2011. They are advising investors, many still leery two years after the financial crisis, to start shifting some investment dollars out of bonds and back into stocks.

 

[REWahoo]

I have owned this fund for 13 months in an IRA rollover acct. I was transferring all of VFIIX (GNMA) to their MM account. It said something about do to high volume of redemptions in this fund the max is $10K. I lowered my transfer to $10K and it took it.

Interesting. Did the $10k limit message pop up when you put in the amount you wished to sell or when you pushed the final "execute transaction" button?

I just tried doing the same thing, moving $25K from VFIIX to my MMkt account. I went all the way through the process, stopping at the last "review and confirm" step and got no $10K limit message.

 

[Texas Proud]

I have owned this fund for 13 months in an IRA rollover acct. I was transferring all of VFIIX (GNMA) to their MM account. It said something about do to high volume of redemptions in this fund the max is $10K. I lowered my transfer to $10K and it took it.

Hmmm... seems strange... GNMA does have check writing privledges... but I guess it is not supposed to be used as your primary checking account...


HAVE you done a lot of trading in this account If so, why


There are restrictions that are in the prospectus... I would suggest you go read it and see what you did to trigger the restriction...


You should not get this issue with other fund companies.... but they don't try and protect existing shareholders like Vanguard does... as they say, if you don't like it... move...

 

[chinaco]

I have owned this fund for 13 months in an IRA rollover acct. I was transferring all of VFIIX (GNMA) to their MM account. It said something about do to high volume of redemptions in this fund the max is $10K. I lowered my transfer to $10K and it took it.

Sorry I was a little unclear about your statement. Are you saying they would only let you sell $10k of the GMNA? Or only let you put $10K into the MM Account.

 

[Meadbh]

I have owned this fund for 13 months in an IRA rollover acct. I was transferring all of VFIIX (GNMA) to their MM account. It said something about do to high volume of redemptions in this fund the max is $10K. I lowered my transfer to $10K and it took it.

I've seen a number of low volume investments, including REITs, exercise redemption limits when there was a lot of panic trading. There has been a lot of press lately about the desirability of getting out of bonds and into equities. They are just trying to avoid a run on their fund.

 

[LOL!]

Uh-oh. I seem to have contributed to the OP's problem. I sold big chunks of Vanguard GNMA earlier in November & December. There were no $10K restrictions at that time.

 

[chinaco]

As reported earlier, the Vanguard Total Stock Market ETF (VTI) had a one-day spike of new issues on Dec. 9 worth about $5.1 billion.

Vanguard Total Stock Market ETF: A $5.1 Billion Inflow - Focus on Funds - Barrons.com

Taxable bond funds saw net outflows of $401 million during the week ending Dec. 8. The last time the category saw weekly net outflows was the week ending Dec. 10, 2008.

Mutual fund investors exiting bond funds FundWatch - MarketWatch

 

[jayc]

I called and they tracked down the transaction. It was the destination MM that had the restriction of 10K. It was the MM they rolled my 401K into last year and it still has about $30K in it.

Who would of guessed your MM sweep account had an input limit?

Can you redeem funds at this place and just put the money in a cash acct?

Their short answer was pick another fund. I will call them back for more info on this.