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Vanguard now charging for money market?
12-14-2015, 05:05 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Jun 2014
Posts: 1,188
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Vanguard now charging for money market?
Ok,
So just noticed a message that as of today there is a fee on the money market.. is there other options? Did I miss a memo? I'm not looking to pay money just to leave money sit somewhere until they can cut me a check.
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12-14-2015, 05:14 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
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I didn't see the message, but Vanguard money market funds have historically had a postive expense ratio. The expense ratio might have gone to 0.00% when yields were so low that Vanguard subsidized the yield to get it to 0.01%. Now that yields are higher, Vanguard can go back to having a non-zero expense ratio.
Or are you talking about something different from the expense ratio?
In any event, the published yield is AFTER taking into account the expense ratio. That is not the case of the money market fund in my spouse's 401(k) plan which loses money because the expense ratio is about 1%.
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12-14-2015, 05:14 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,202
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I moved all my cash from VMMXX to Ally quite a while ago, but where did you see the message?
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No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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12-14-2015, 05:22 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Jun 2014
Posts: 1,188
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It was under my settlement account, a tiny note that was "collapsed" in one account but expanded in the other so I noticed it.
As of 12/14/2015, the expense ratio on your Vanguard Prime Money Market Fund has changed from 0.00% to 0.16%. The problem is as far as I know, that account is still only paying .15% .. ie so my math says that I would now pay them to keep my money.. NOT happening.
I did a little more digging and it appears there is a Federal Prime Money Market Fund that may be where they are pushing everyone to VMFXX which use to be closed and they now re-opened. From what I can tell that would at least still be +.02% after expenses which would be fine...as long as Im' not paying them.
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12-14-2015, 05:34 PM
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#5
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Recycles dryer sheets
Join Date: Nov 2013
Posts: 233
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Could it be Vanguard is anticipating a FED rate hike this week?
If so the SEC yield should be greater than the current 0.15%.
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12-14-2015, 06:01 PM
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#6
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Recycles dryer sheets
Join Date: May 2015
Posts: 244
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I noticed this on my accounts today. I will call tomorrow and see if I can get an explanation.
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12-14-2015, 08:10 PM
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#7
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Recycles dryer sheets
Join Date: Sep 2012
Posts: 119
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I just checked my account and the message I see says the expense ratio is going from .17% to .16%.
I have not transitioned my account to the brokerage structure. I'm not sure if that makes a difference.
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12-14-2015, 08:26 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Dec 2014
Posts: 2,509
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There have been some SEC changes that are changing the money market funds. SEC set new rules in the summer of 2014 that have to be implemented by October 2016. Many brokerages houses are implementing part of it this month (Fido and Vanguard at least).
These changes are not just a vanguard thing.
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12-15-2015, 07:39 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,263
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Quote:
Originally Posted by karen1972
It was under my settlement account, a tiny note that was "collapsed" in one account but expanded in the other so I noticed it.
As of 12/14/2015, the expense ratio on your Vanguard Prime Money Market Fund has changed from 0.00% to 0.16%. The problem is as far as I know, that account is still only paying .15% .. ie so my math says that I would now pay them to keep my money.. NOT happening.
I did a little more digging and it appears there is a Federal Prime Money Market Fund that may be where they are pushing everyone to VMFXX which use to be closed and they now re-opened. From what I can tell that would at least still be +.02% after expenses which would be fine...as long as Im' not paying them.
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You're totally misinterpreting the situation... the net yield would never be negative and is actually a small positive even after the 0.16% ER.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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12-15-2015, 07:46 AM
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#10
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Thinks s/he gets paid by the post
Join Date: Jun 2014
Posts: 1,188
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Quote:
Originally Posted by pb4uski
You're totally misinterpreting the situation... the net yield would never be negative and is actually a small positive even after the 0.16% ER.
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You'll have to explain to me how that is.. expense = .16% Yield = .15%, what am I missing?
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12-15-2015, 07:59 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,263
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The yield is AFTER deducting the 0.16% in expenses.
Also see what LOL! said in post #2:
Quote:
....In any event, the published yield is AFTER taking into account the expense ratio. ....
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What is interesting is that the distribution yield has increased dramatically from 0.01% and creeping up to 0.10% in December 2015.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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12-15-2015, 08:18 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2011
Location: NC Triangle
Posts: 5,807
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Vanguard Prime Money Market Fund holds six months of the money I've earmarked as emergency funds. I think of it as completely separate from "investments" and won't change in the near future. I've been happy with it.
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12-15-2015, 08:20 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Jun 2014
Posts: 1,188
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Quote:
Originally Posted by pb4uski
The yield is AFTER deducting the 0.16% in expenses.
Also see what LOL! said in post #2:
What is interesting is that the distribution yield has increased dramatically from 0.01% and creeping up to 0.10% in December 2015.
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Yes that is interesting.. however I had made the assumption that they hadn't "fixed" their SEC yield they are showing yet so it was still showing based on 0% fees.. as I would have assumed if you increased the fee it should have shown a marked decrease in Yield until the next rate increase.
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