Gyroscopic Investing

from an update to the prospectus:

"Vanguard Admiral Treasury Money Market Fund (the Fund) will no longer accept
additional investments from any financial advisor, intermediary, or institutional
accounts, including those of defined contribution plans. Furthermore, the Fund
is no longer available as an investment option for defined contribution plans.
The Fund is closed to new accounts and will remain closed until further notice.
During the Fund’s closed period, current retail shareholders may continue to
purchase, exchange, or redeem shares of the Fund..."

https://personal.vanguard.com/us/Litera ... main=false

This seems to imply increasing pressure on this MMF. Also, why is the expense ratio higher than it is for VTI? Is it best to avoid the MMF and hold T-bills directly? What are the odds of Vanguard "breaking the buck?"

Also, why is the expense ratio higher than it is for VTI? Is it best to avoid the MMF and hold T-bills directly? What are the odds of Vanguard "breaking the buck?"

The pressure on the low end of the curve is getting crazy. Yes, I would probably go with either T bills or a very short term Treasury ETF that holds at least 90% in the real thing. I think the danger of breaking the buck is pretty low, but not nonexistent. Vanguard has a lot of money and I am confident they would back up their MMF. But it could get ugly.

Ad Orientem wrote: Vanguard has a lot of money and I am confident they would back up their MMF. But it could get ugly.

Please explain this a little further. In my mind, VG does have a lot of money, but it's allocated into specific funds as assets for different investors. It's not like VG could dip into the Billions they have in Total Stock Market index fund to temporarily pay back the T-MMF holders, right?

TripleB wrote:

Ad Orientem wrote: Vanguard has a lot of money and I am confident they would back up their MMF. But it could get ugly.

Please explain this a little further. In my mind, VG does have a lot of money, but it's allocated into specific funds as assets for different investors. It's not like VG could dip into the Billions they have in Total Stock Market index fund to temporarily pay back the T-MMF holders, right?

That's a good and rather obvious point that I had overlooked. Vanguard is run on almost a not for profit basis. So they may not have much in the form of unallocated financial reserves.