What Is a VMFXX?
As its main goal is to provide current income and preserve shareholders’ principal investments, the fund maintains a share price of $1. For this reason, it is considered one of the most conservative investment options offered by Vanguard.
How Does VMFXX Work?
The fund invests in very short-term investments of less than one year to maturity, if interest rates go up (or down), the yield will also go up (or down). Barring a financial crisis, there is little risk associated with this fund.
What’s the Average Yield of VMFXX?
VMFXX vs. VMMXX
The VMFXX invests in only short-term US government bonds and obligations. It is the safest possible thing one can invest it.