CD versus SWVXX (bond, mutual fund, cash, invest)

[Tustin714]

Using Morningstar's info, SWVXX has a yield of ~4.1% and expense ration of 0.34%, while the CDs I'm currently in (and can continue to invest in) are all around 5.4%. Soooo

Is there any reason to stay in SWVXX at this point, versus short-term CDs?

Thanks.

[Lillie767]

Originally Posted by Tustin714

Using Morningstar's info, SWVXX has a yield of ~4.1% and expense ration of 0.34%, while the CDs I'm currently in (and can continue to invest in) are all around 5.4%. Soooo

Is there any reason to stay in SWVXX at this point, versus short-term CDs?

Thanks.

First, get the correct information.

Morningstar shows the 4.14% TTM Yield which is the Trailing 12-months Yield, not the current yield.
https://www.morningstar.com/funds/XNAS/SWVXX/quote

The current 7-day yield is 5.23% (as of 9/25/2023).
https://www.schwabassetmanagement.com/products/swvxx

[mathjak107]

most do not know what they are looking at when it comes to money markets and bond funds , it gets even worse when they try to interpret yields on tips and inflation proof securities.

many don’t even know the standard terms of expressing yields is very different for money markets vs bond funds and they can’t understand why they are so different

[Tustin714]

I appreciate the updated information, particularly about TTM. But to then update my inquiry, with a CD yield of 5.4% and SWVXX still having an adjusted ratio of 0.34%, I'd basically squeeze out about 0.5% extra on a CD, correct (assuming there is enough money involved to make a substantial enough difference).

Thanks.

[mathjak107]

Originally Posted by Tustin714

I appreciate the updated information, particularly about TTM. But to then update my inquiry, with a CD yield of 5.4% and SWVXX still having an adjusted ratio of 0.34%, I'd basically squeeze out about 0.5% extra on a CD, correct (assuming there is enough money involved to make a substantial enough difference).

Thanks.

the cd will not go up if rates go up , swvxx changes daily with the market …the next seven days can be different then the last 7.

money markets are changing daily

[Tustin714]

Originally Posted by mathjak107

the cd will not go up if rates go up , swvxx changes daily with the market …the next seven days can be different then the last 7.

money markets are changing daily

True, but all things being equal (CD %, swvxx %), over the course of say a 1-month CD, swvxx must still exceed the CD by the expense ratio to be a better bet?

Thanks.

[mathjak107]

the expense is already included in the stated return on money markets

[recycled]

Originally Posted by Tustin714

Using Morningstar's info, SWVXX has a yield of ~4.1% and expense ration of 0.34%, while the CDs I'm currently in (and can continue to invest in) are all around 5.4%. Soooo

Is there any reason to stay in SWVXX at this point, versus short-term CDs?

Thanks.

You are possibly mis-interpreting something. I have SWVXX in my Schwab account. My account on the Schwab web site shows that the current yield is 5.22 percent. The current yield is a lot more than the year to date yield (a little over 3 percent) or the 1 year yield (roughly 4 percent). I park cash (at least a year of expenses) that I want quick emergency access to in SWVXX, not in a CD.

[Lillie767]

Originally Posted by Tustin714

Using Morningstar's info, SWVXX has a yield of ~4.1% and expense ration of 0.34%, while the CDs I'm currently in (and can continue to invest in) are all around 5.4%. Soooo

Is there any reason to stay in SWVXX at this point, versus short-term CDs?

Thanks.

Do you understand the difference between a money market mutual fund and an insured CD?

There is more to investing that looking at yields.


Enter "Difference between money market mutual fund and insured CD" into your search engine.

You may be able to answer your own questions.

[mathjak107]

usually when someone gets so deep into returns on cash that they are likely missing out on a well constructed portfolio of things .

in the scheme of things a small difference in cash should be negligible in the overall plan and of little concern