Vanguard Money Markets deliver liquidity and safety

Vanguard CEO Tim Buckley and John Hollyer, head of Global Fixed Income, discuss the benefits of money market funds.

Tim Buckley: Now, let's flip over to money markets. Give us your perspective on what happened there and what you're going for in the money market world.

John Hollyer: Money markets, for the longest time at Vanguard, have always been about safety and liquidity. In money markets, there's usually very little added return in exchange for taking more risk. And our clients are relying on us to be there to fund them with liquidity whenever they need it. That's been our watchword for a long time, and we've structured our portfolios to essentially be strong in all weather, regardless.

So, for example, in prime money market funds, having a large amount of government securities as a core, that bolsters the portfolio, strengthens liquidity in all markets. I think that's been a discipline we've held for a long time. Our expense ratio advantages do the heavy lifting to assure our clients get really competitive returns year after year. And the portfolio itself runs at a low risk level.

Important information:

The Fund is only available to retail investors (natural
persons). You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

All investing is subject to risk, including possible loss of principal.

There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
U.S. government backing of Treasury or agency securities applies only to the underlying securities and does not prevent share-price fluctuations. Unlike stocks and bonds, U.S. Treasury bills are guaranteed as to the timely payment of principal and interest.
Diversification does not ensure a profit or protect against a loss.

© 2020 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor of the Vanguard Funds.