In a bid to ensure its yields remain competitive, Vanguard plans by early August to merge the $6.7 billion Vanguard Treasury Money Market Fund (VMPXX) into the lower-cost $21.8 billion Vanguard Admiral Treasury Money Market Fund (VUSXX).
In addition, Vanguard says it has closed the Vanguard Federal Money Market Fund to all new accounts and to additional purchases from current institutional accounts. A $10,000 daily investment limit has been placed on current retail accounts.
“Taking these preventative measures will protect fund shareholders and will help ensure that the yields of the funds remain competitive,” said Bill McNabb, Vanguard CEO, in a statement. “It is quite possible that yields on government-backed securities, and consequently the Vanguard Admiral Treasury Money Market and Vanguard Federal Money Market Funds, will remain quite low for the foreseeable future. Shareholders may wish to consider switching to alternative Vanguard fund options that are consistent with their goals and risk tolerance.”
Vanguard offers several other money market funds, including Vanguard Prime Money Market Fund (VMMXX) and Vanguard’s national and state-specific tax-exempt money market funds.