The first to highlight the error was Daniel Wiener, the editor of the Independent Adviser for Vanguard Investors newsletter. He noted that his monthly brokerage statements revealed the estimated yield on Vanguard’s New York Municipal Money Market fund (VYFXX) to be unchanged at 1.27% between October 2019 and September 2020. But Vanguard’s website had reported the fund’s SEC yield, a metric required by US regulators, as varying between 0.05% and 2.88% over the same period.
Wiener, chairman and co-founder of Adviser Investments commented:
What a mess. It is a good thing I wasn’t relying on Vanguard to tell me what kind of income to expect. Otherwise, I would have been sorely disappointed with the reality.
Wiener also complained that Vanguard had withdrawn a facility allowing investors to request details on formulas used to calculate information provided in client statements.
An anonymous analyst shared with the Financial Times:
Short-term interest rates have been bouncing all over the place. No one is investing in money market funds and expecting to earn a yield much above zero. They [money market funds] are being used as home for cash when investors want to escape volatility.
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