BOSTON, July 7 (Reuters) - Vanguard Group Inc reallocated operating expenses on a $1.9 billion municipal money market fund, a spokesman said, a move called akin to waiving fees as rival fund firms have done amid low interest rates.
Because yields have fallen below expenses on the Vanguard Pennsylvania Municipal Money Market Fund, “expenses of the fund are being temporarily reallocated to other funds within Vanguard,” company spokesman Freddy Martino said via e-mail.
Vanguard, the world’s largest mutual fund manager, said in a securities filing late on Monday made the change “to maintain a zero or positive yield on the fund.” Vanguard is not currently reallocating expenses on other funds, Martino said.
Daniel Wiener, who edits a newsletter for Vanguard investors, in an e-mailed note described the move as “waiving money market fees,” as other firms have done. Vanguard and rivals have also closed some money funds to new investors as a way to protect returns for existing ones.
The yield on the benchmark 10-year U.S. Treasury note, around 2% at the start of the year, has fallen sharply amid the COVID-19 pandemic and was at 0.6709% on Tuesday morning.
Reporting by Ross Kerber, editing by Louise Heavens
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