Why We've STOPPED Buying Fidelity’s Money Market Funds (SPAXX, VMFXX or T-Bills)| Weekly Update

In the video titled "Why We've STOPPED Buying Fidelity’s Money Market Funds (SPAXX, VMFXX or T-Bills)| Weekly Update," the presenters discuss their decision to withdraw funds from Fidelity's money market offerings in favor of Vanguard's higher-yield options. The discussion is centered around the current state of Money Market Funds, Treasury Yields, and investment strategies.

Main Financial Strategies and Market Analyses:

• Comparison of Money Market Funds:
  • The presenters analyze the yields of top Money Market Funds from Fidelity, Schwab, and Vanguard, focusing on the 7-Day SEC yield as a standardized measure of performance.
  • Fidelity's funds are noted to have higher expense ratios compared to Vanguard, leading to lower net yields for investors.
• Investment Shift:
  • They recommend moving excess cash from Fidelity's Money Market Funds to Vanguard's offerings due to better yields and lower expenses.
  • The presenters emphasize the importance of understanding the expense ratios associated with Money Market Funds and how they impact overall returns.
• Treasury Yields Overview:
  • The video reviews recent trends in Treasury Yields, noting fluctuations in response to economic factors and Federal Reserve communications.
  • The presenters highlight expectations for upcoming treasury auctions and the current landscape of corporate and agency bonds.
• Investment Flexibility:
  • They mention the strategy of using T-Bill ladders to maintain liquidity while maximizing yield, as T-Bills offer better returns compared to Fidelity’s Money Market Funds.

Step-by-Step Guide:

• Evaluate Current Money Market Fund Options:
  • Compare yields and expense ratios across Fidelity, Schwab, and Vanguard.
• Consider Moving Funds:
  • If yields at Vanguard are significantly higher, consider transferring cash from Fidelity to Vanguard or E-Trade.
• Utilize T-Bill Ladders:
  • Invest in a series of T-Bills with staggered maturities to maintain access to cash while earning higher yields.
• Monitor Treasury Auctions:
  • Keep track of upcoming treasury auctions and yields to identify the best investment opportunities.

Presenters/Sources:

The video features insights from members of the "Super Savers" and "Bond Course" community, though specific names are not mentioned in the subtitles. The content is also supported by references to various financial platforms and treasury yield resources.