Changes to our taxable money market fund lineup

Currently, we’re asserting some alterations to our taxable cash industry lineup that aim to much better guidance your demands for principal preservation, liquidity, and competitive yields. We’ve observed and navigated two industry crises in 12 yrs. With that as a backdrop, we think it’s much better to present customers with a hugely competitive generate by lowering costs on a safe governing administration portfolio rather than incurring chance in the primary industry.

A search at the essential alterations

Vanguard Prime Money Market place Fund will alter its investment technique and be renamed Vanguard Income Reserves Federal Money Market place Fund. When this alter goes into outcome in late September 2020, the fund will invest almost completely in hard cash, U.S. governing administration securities, and/or repurchase agreements that are collateralized entirely by U.S. governing administration securities or hard cash. Though the fund has historically been managed additional conservatively than its peer group, this alter even further lowers its chance.

Powerful these days, the minimal initial investment for the fund’s Admiral™ Shares is getting lowered from $five million to $three,000, creating additional than 1 million shareholders qualified for reduced costs (.10% for Admiral Shares when compared with .16% for Investor Shares).

With these alterations, Vanguard seeks to carry on to produce a cash industry fund with yields that are hugely competitive to people of primary cash industry cash, when offering the protection and security of a portfolio of governing administration securities. Our formulation is as very simple as it has been thriving: prudent administration and small charges.

Our many years of practical experience, deep investment knowledge, and small charges have enabled Vanguard’s taxable cash industry cash to produce hugely competitive yields with out taking undue risks. This technique has authorized Vanguard Prime Money Market place Fund Admiral Shares to outperform ninety seven% of the competitors in excess of the previous 2 many years.* Much more outstanding, Vanguard Federal Money Market place Fund Investor Shares has trailed Vanguard Prime Money Market place Fund Investor Shares only a little bit in excess of the exact time period.**

Vanguard’s governing administration cash industry cash have outperformed their peer-group averages and are ranked within just the top rated decile of friends in excess of the 1-, three-, five-, and 10-year durations ended June 30, 2020. We think a small-expense governing administration cash industry fund has the potential to rival the generate of a primary cash industry fund and at lower degrees of credit rating and liquidity chance. Vanguard’s governing administration cash industry cash have delivered strong returns relative to primary cash industry cash, and at lower degrees of chance.***

What you need to do

Current Investor share proprietors (VMMXX): You have the option to immediately convert† to Admiral Shares to start off taking benefit of the lower cost ratio. You can find very simple action-by-action recommendations here. If you don’t initiate a conversion, you are going to be immediately converted sometime in between late 2020 by 2021. Note: Our checkwriting provider is not readily available for the fund’s Admiral share course. Checkwriting is readily available for Vanguard Federal Money Market place Fund and other Vanguard cash industry cash.

Current Admiral share proprietors (VMRXX): You don’t need to consider any action.

Personal Advisor customers who very own Investor Shares (VMMXX): You are going to immediately be converted† to Admiral Shares in the course of the following quarterly rebalance. Speak to an advisor if you have concerns about this transition. Note: Our checkwriting provider is not readily available for the fund’s Admiral share course. Checkwriting is readily available for Vanguard Federal Money Market place Fund and other Vanguard cash industry cash.

Reopening the Treasury Money Market place Fund

Vanguard Treasury Money Market place Fund (VUSXX) has reopened to new investors, also successful these days. The fund was shut in April, in the course of a period of heightened volatility and increased curiosity in U.S. Treasury investments, to safeguard existing investors from an accelerated reduction in the fund’s generate.

Simply because of alterations in the industry ecosystem, Vanguard thinks it’s now in the ideal interests of shareholders to reopen the fund.

*For the twenty-year period ended June 30, 2020, Vanguard Prime Money Market place Fund Admiral Shares outperformed ninety seven% of its peer-group typical. (Supply: Lipper, a Thomson Reuters Company.) Benefits will vary for other time durations. Only cash with a minimal twenty-year historical past were being included in the comparison. Note that the competitive overall performance data proven symbolize previous overall performance, which is not a promise of future benefits, and that all investments are subject matter to risks. For the most new overall performance, take a look at our web page at vanguard.com/overall performance.
**The overall performance of Vanguard Prime Money Market place Fund Investor Shares is as follows: 1 year, 1.fifty two% five yrs, 1.25% 10 yrs, .64% twenty yrs, 1.68% 30 yrs, 2.eighty two% considering that inception (June 4, 1975), 4.85%. The fund’s existing 7-day SEC generate (August 21, 2020) is .05%. The fund’s cost ratio is .16%. The overall performance of the fund’s benchmark (Money Market place Money Common) is as follows: 1 year, 1.16% five yrs, .89% 10 yrs, .44%. The overall performance of Vanguard Federal Money Market place Fund Investor Shares is as follows: 1 year, 1.39% five yrs, 1.10% 10 yrs, .fifty five% twenty yrs, 1.sixty% 30 yrs, 2.seventy five% considering that inception (July 13, 1981), 4.09%. The fund’s existing 7-day SEC generate (August 21, 2020) is .09%. The fund’s cost ratio is .11%. The overall performance of the fund’s benchmark (US Governing administration Money Market place Money Common) is as follows: 1 year, .93% five yrs, .68% 10 yrs, .34%. Performance data are as of June 30, 2020. Sources: Bloomberg Lipper, a Thomson Reuters Company. The overall performance data proven symbolize previous overall performance, which is not a promise of future benefits. Expense returns will fluctuate. Current overall performance may well be lower or better than the overall performance data cited. For overall performance data existing to the most new thirty day period-conclude, take a look at our web page at vanguard.com/overall performance. The generate quotation additional carefully demonstrates the existing earnings of the fund than the whole return quotation. The overall performance of an index is not an exact illustration of any unique investment, as you can’t invest immediately in an index.
***For the 1-, three-, five-, and 10-year durations ended June 30, 2020, nine of nine Vanguard cash industry cash outperformed their peer-group averages and 2 of 2 Vanguard governing administration cash industry cash outperformed additional than 70% of all primary cash industry cash. (Supply: Lipper, a Thomson Reuters Company.) Benefits will vary for other time durations. Only cash with a minimal 10-year historical past were being included in the comparison. Note that the competitive overall performance data proven symbolize previous overall performance, which is not a promise of future benefits, and that all investments are subject matter to risks. For the most new overall performance, take a look at our web page at vanguard.com/overall performance.
†Share course conversions are not a taxable celebration.

Notes:

Vanguard Prime Money Market place Fund, until eventually late September 2020: The fund is only readily available to retail investors (all-natural individuals). You could get rid of cash by investing in the fund. Although the fund seeks to protect the benefit of your investment at $1 for every share, it can’t promise it will do so. The fund may well impose a charge on the sale of your shares or may well temporarily suspend your capability to market shares if the fund’s liquidity falls under needed minimums since of industry ailments or other elements. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Company or any other governing administration company. The fund’s sponsor has no lawful obligation to present monetary guidance to the fund, and you must not expect that the sponsor will present monetary guidance to the fund at any time.

Vanguard Income Reserves Federal Money Market place Fund, following late September 2020, Vanguard Treasury Money Market place Fund, and Vanguard Federal Money Market place Fund: You could get rid of cash by investing in the fund. Although the fund seeks to protect the benefit of your investment at $1 for every share, it can’t promise it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Company or any other governing administration company. The fund’s sponsor has no lawful obligation to present monetary guidance to the fund, and you must not expect that the sponsor will present monetary guidance to the fund at any time.

All investing is subject matter to chance, which include the attainable reduction of the cash you invest.