The Independent Advisor for Vanguard Investors newsletter recently sent out a brief entitled, "Billions In, Billions Out - It's Real Money," which discussed the huge flows from Prime into Govt MMFs at Vanguard. They wrote, "Billions of dollars are sloshing into, and out of Vanguard's money market funds as investors wrestle with new SEC's rules scheduled to take effect in October. Investors are sucking billions per month out of prime money market funds, which invest mainly in short-term debt issued by companies, and pouring it into funds focused on government debt. The SEC rules, meant to make money market funds safer, have set off a slew of unintended consequences. Over the past four months at Vanguard $13.5 billion has drained out of Vanguard Prime Money Market while more than $19 billion has sluiced into Vanguard Federal Money Market.... You can see there have been net outflows for all of Vanguard's prime and municipal money market funds while the government money market funds have raked in billions of dollars." The newsletter also pointed out a recent Vanguard filing for its internal Market Liquidity Fund and Municipal CMF. This says, "Vanguard Market Liquidity Fund has announced a 1-for-100 reverse share split at the close of business on August 12, 2016. The reverse share split will not affect the rights or total dollar value of a shareholder’s investment in the Fund and will not be taxable.... Vanguard Municipal Cash Management Fund has announced a 1-for-100 reverse share split at the close of business on August 12, 2016. The reverse share split will not affect the rights or total dollar value of a shareholder's investment in the Fund and will not be taxable." We believe this means that Vanguard intends to reset the NAVs for these soon-to-be-floating NAV funds at $100.00 instead of $1.0000. (See our June 29 News, "UBS Liquidates Sweeps, Goes Govt; Vanguard Floats Internal Money Fund.")

Email This Article




Use a comma or a semicolon to separate

captcha image

Daily Link Archive

2024 2023 2022
March December December
February November November
January October October
September September
August August
July July
June June
May May
April April
March March
February February
January January
2021 2020 2019
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2018 2017 2016
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2015 2014 2013
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2012 2011 2010
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2009 2008 2007
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2006
December
November
October
September