Vanguard Repurchase Agreement

With the Prime Money Market Fund, the fund giant aims to improve credit quality and liquidity levels by investing “almost exclusively” in U.S. Treasury bonds, cash transactions and pensions exclusively guaranteed by the U.S. government. Under new money market reforms, sovereign wealth funds must invest at least 99.5% of their total assets in cash, government bonds and/or pension transactions exclusively guaranteed by government securities or cash (excluding government bonds). As a general rule, the fund invests 100% of its assets in government bonds and will therefore meet the 99.5% requirement to be designated as a public monetary fund. A sovereign money market fund must hold at least 99.5% of its assets in cash, U.S. Treasury bonds and/or pension transactions exclusively guaranteed by U.S. Treasury bonds or cash. On the other hand, a premium money consumer fund can invest heavily in certain corporate-issued securities — most often commercial securities — as well as in U.S. government-issued securities and other money market securities. In order to give investors the best chance of investment success, we continually evaluate our fund offering. In some cases and after careful consideration, we find that even our best-known funds need to evolve to better serve our clients. Among the changes announced by the investment fund giant, with $6.300 billion in global assets, are: the fund is aimed at investors with low risk tolerance; However, the Fund is subject to the following risks, which could affect the Fund`s performance: they could lose money by investing in the fund.

Although a money fund is trying to get the value of an investment at $1 per share, it cannot guarantee that it will. The investment in this investment option is not insured or guaranteed by the FDIC or any other government authority. The sponsor is not legally required to financially support the underlying fund and you should not expect the sponsor to financially support the underlying fund at any time. We recently announced changes to our Prime Money Market Fund to better meet your principles and liquidity needs, while achieving a competitive long-term return. With these changes, Vanguard intends to continue to provide a money fund with highly competitive returns against the yields of prime currency market funds, while ensuring the security of a portfolio of government bonds. Our formula is as simple as it is successful: careful management and low cost. “We are committed to structuring and managing our money funds prudently while maintaining their security and liquidity, and we are confident that these changes will allow the fund to continue to meet our clients` expectations while achieving a competitive long-term return,” added Davis. With effect as of September 29, the Vanguard Prime Money Market Fund has a new name, a new investment strategy and a change in its investor class. Here are the details of the changes: The fund is trying to provide current revenue while maintaining cash flow and a stable share price of $1. “The market`s navist investors are prioritizing maintaining capital for their money market investments, and we believe that rewards are no longer worth the risk even for the most conservative funds,” Said Greg Davis, Chief Investment Officer of Vanguard, in a statement. At the beginning of the year, investors plunged into money funds when equities got into position and businesses and municipalities traded in a very short time in March, before the Fed aggressively intervened to support the bond market. Vanguard Cash Reserves Federal Money Market Fund is designated as a public money fund designed to reduce the fund`s credit risk and strengthen its liquidity.

Since the beginning of the year, the VMMXX has returned 0.52% until July 31, while the average benchmark has returned 0.35%.