Manager perspectives

Tried and true money markets get boost with rising rates

March 27, 2023

Can you walk us through your background? For instance, how did you come to Vanguard Fixed Income Group, and what roles have you held during your career?
Higher interest rates have made it more attractive to hold money market funds throughout most of the past year. How has this trend affected markets, and how do we expect it will do so going forward?
Is there a particular market condition that money market funds are ideal for? What role should money market funds play in the current market environment?
How should investors expect money market funds to behave as interest rates stabilize?
What types of money market fund securities are more attractive when interest rates are rising?
Speaking of risks, the largest risk investors tend to think about with money markets is breaking the buck—when the net asset value of the fund dips below the $1 mark. How much should a money market investor be concerned with that risk?
Many money market funds have been investing in Federal Reserve repurchase agreements. What are some of the benefits of this strategy?
Money market funds are considered a low-risk investment and yet there are still risks involved with any investment. How does your strategy implement risk management, and how do those tactics benefit the portfolio and the end investor?
Not all money market strategies are the same. What’s your approach to investing in the asset class, and what makes it unique or more effective?
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Meet the expert

Nafis Smith
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