Vanguard offered two “prime” money market mutual funds: the Vanguard Cash Reserves Federal Money Market Fund Admiral Shares (VMRXX) and the Vanguard Cash Reserves Federal Money Market Fund (VMMXX). However, VMMXX shares were converted to VMRXX back in 2021. Many investors still ask about the differences between these two funds since VMMXX was one of the largest prime money market mutual funds and VMRXX is one of the largest in the market today. When comparing VMRXX vs VMMXX, it is clear which was better.

The Short Answer

VMRXX and VMMXX were two share classes of the exact same fund! There is no need to compare VMRXX vs VMMXX because the only difference is the expense ratio and yield. It should be noted that VMMXX has closed and shares have been converted to VMRXX.

VMRXX vs VMMXX Historical Performance

Since its inception, VMRXX outperformed VMMXX by .12% on an annualized basis. That compounded to a 3.48% cumulative difference over the 20 years that they co-existed, which is relatively small.

Current Yields for VMMXX & VMRXX

The current 7 day yield is a standardized yield metric for money market mutual funds and the 7 day yields for VMRXX can be found on the fund’s webpage. See here for VMRXX.

What rate is VMRXX & VMMXX paying?

The current interest rate for VMRXX, VMMXX, and other Vanguard money markets can be found on Vanguard’s money market page.

VMMXX & VMRXX Details

The expense ratio was .16% for the VMMXX investor shares and is .10% for the VMRXX ultra shares. Since the funds were just different share classes of the same portfolio, this difference in expenses is what accounted for the differences in yield and performance. Neither fund charges a load or 12b-1 fees.

VMMXX is closed and cannot be invested in, while VMRXX has a minimum investment of $3,0000.

I have not checked every brokerage, but VMRXX is generally only available to clients of Vanguard.

Like most money market mutual funds, investors can sell VMRXX at any time.

VMMXX & VMRXX Risks

Hypothetically, an investor could lose money with VMRXX (or VMMXX when it existed), but I personally do not think that is a realistic risk as I believe the fund sponsor or the federal government would intervene if that were about to happen. Technically, it is possible to lose money in VMRXX though.

As of July 31, 2023, VMRXX had over $107 billion in net assets.

Is VMMXX or VMRXX FDIC Insured?

No, VMRXX is not FDIC insured (nor was VMMXX)

Holdings

The two funds are share classes of the same portfolio, so the holdings were identical. The largest holding of VMRXX is repurchase agreements (repos) at 46.8%, followed by US government obligations at 28.3%, and T-bills at 24.9%.

Tax Considerations

VMRXX is (and VMMXX was) a “prime” fund which means that it can invest in both government and non-government financial instruments. However, taxable investors may find better after-tax yields in government or municipal (muni) money market funds, both of which offer tax benefits that may improve investors’ after-tax yield.

Government and Treasury Money Market Funds

Most states have an income tax. However, interest from Treasuries is exempt from state tax. Therefore, investors in states with income tax may be better off with a Treasury-only money market fund (such as SNSXX or SUTXX) that only invests in Treasuries.

Muni Money Market Funds

Investors subject to higher tax rates may consider municipal (muni) money market funds due to the fact the interest is typically exempt from federal income tax (and often from state tax too!).

The caveat with muni money market funds though is that the yields can move up and down A LOT. Therefore, the stated yield that an investor looks up on any given day is not necessarily indicative of the future return. To understand why, read my post on muni money market yields.

Rather than expecting a muni money market fund’s stated yield, I encourage investors to expect the trailing average yield (over the past few weeks). Generally speaking, the after tax returns of munis will only be higher than non-muni money markets for those in the highest tax brackets.

Which is Best? VMRXX or VMMXX?

VMMXX is closed, so VMRXX is the only choice between these two!

Schwab offers dozens of money market mutual funds, including many with similar sounding names. Two of the largest funds in the marketplace today are the Schwab Government Money Fund (SNVXX) and the Schwab Value Advantage Money Fund Investor Shares (SWVXX). Comparing SNVXX vs SWVXX may be confusing because the name and fund details are similar, although there is one important difference.

The Short Answer

When comparing SWVXX vs SNVXX, the main difference is that SWVXX is a prime fund while SNVXX is a government fund. This means that SNVXX primarily owns government-backed securities, while SWVXX owns all types of assets. Therefore, SWVXX is theoretically riskier and generates a higher yield.

SNVXX vs SWVXX Historical Performance

Since their common inception, SWVXX has outperformed SNVXX by over .18% annualized. This has compounded to a 1.65% cumulative difference over the past 8+ years. SWVXX currently yields .18% more than SNVXX, so I would expect this outperformance to continue. It is not uncommon for prime funds to outperform their non-prime counterparts.

Current Yields for SWVXX & SNVXX

The current 7 day yield is a standardized yield metric for money market mutual funds and the 7 day yields for both SNVXX and SWVXX can be found on the fund’s webpages. See here for SNVXX and here for SWVXX.

What rate is SNVXX & SWVXX paying?

The current interest rate for SNVXX, SWVXX, and other Schwab money markets can be found on Schwab’s money market page.

SNVXX & SWVXX Details

The expense ratio for both SNVXX and SWVXX is .34%. Neither fund charges a load or 12b-1 fees.

Neither SNVXX nor SWVXX has a minimum investment and investors can invest as little as one cent. Each fund has lower-cost share classes, which are mentioned below.

I have not checked every brokerage, but SNVXX and SWVXX are generally only available to clients of Schwab.

Like most money market mutual funds, investors can sell SNVXX or SWVXX at any time.

SNVXX vs SWVXX Risks

Hypothetically, an investor could lose money with SNVXX or SWVXX, but I personally do not think that is a realistic risk as I believe the fund sponsor or the federal government would intervene if that were about to happen. Technically, it is possible to lose money in SWVXX or SNVXX though.

It is important to note that SWVXX is a prime fund and holds some non-government assets, which have been and are perceived to be riskier than government assets. So, again, hypothetically (and technically) SWVXX is the riskier of the two funds.

As of June 30, 2023, SNVXX’s portfolio was nearly $18 billion, while SWVXX was nearly $130 billion.

IS SNVXX or SWVXX FDIC Insured?

No, neither SNVXX nor SWVXX are FDIC insured.

Holdings

The two funds both invest in short-term securities, but SNVXX only invests in government-backed securities. As a prime fund, SWVXX invests in non-government debt like commercial paper and CDs. Most of SNVXX’s holdings are in government repurchase agreements (76%) and agency debt (22%) among other things. SWVXX holds 43% in government repurchase agreements and 25% in CDs, as well as smaller positions in other government and non-government assets.

Tax Considerations

SNVXX is a government fund, which means that it invests in government securities. SWVXX is a prime fund which means that it can invest in a wider variety of instruments. This means that SNVXX is a bit more tax-efficient for those who are subject to state taxes. However, investors subject to state tax should consider a “Treasury only” fund like SNSXX, since a much greater proportion of the income will be exempt from state tax. Also, taxable investors may find better after-tax yields in municipal (muni) money market funds, which offer tax benefits that may improve investors’ after-tax yield.

Treasuries and Treasury Money Markets

Treasuries are treated very differently than other money market assets (including Treasury repos) for tax purposes. Income from government repos (that both SWVXX and SNVXX own) is subject to state income tax. Income from Treasury bonds is exempt from state income tax. Therefore, SWVXX is generally a better choice for any investor subject to state tax, although a Treasury-only fund would be even better (depending on yields).

Muni Money Market Funds

Investors subject to higher tax rates may consider municipal (muni) money market funds due to the fact the interest is typically exempt from federal income tax (and often from state tax too!).

The caveat with muni money market funds though is that the yields can move up and down A LOT. Therefore, the stated yield that an investor looks up on any given day is not necessarily indicative of the future return. To understand why, read my post on muni money market yields.

Rather than expecting a muni money market fund’s stated yield, I encourage investors to expect the trailing average yield (over the past few weeks). Generally speaking, the after tax returns of munis will only be higher than non-muni money markets for those in the highest tax brackets.

High Balances

Investors allocating more than $100,000 may want to consider the “ultra” share class of SNVXX (which is SGUXX) or SWVXX (which is SNAXX)

Is SNVXX or SWVXX a Better Fund?

As mentioned above, SWVXX has outperformed in the past and I expect that to continue given the its higher yields. This higher yield comes from holding riskier investments and prime funds are theoretically riskier (I say theoretically because the federal government often intervenes if the financial system is at risk). However, some of of SNVXX’s income is exempt from state tax, so the after-tax yield is higher for investors subject to state taxes. These investors may want to invest in a Treasury only fund like FDLXX though, where they may be able to get both a higher after-tax yield and more safety.

Schwab offers several money market mutual funds, including multiple government and Treasury money market funds with similar sounding names. Two of the largest funds in the marketplace today are the Schwab Treasury Obligations Money Fund Investor Shares (SNOXX) and the Schwab U.S. Treasury Money Fund Investor Shares (SNSXX). Comparing SNOXX vs SNSXX may be confusing because the name and fund details are nearly identical, although there is one important difference.

The Short Answer

Comparing SNOXX vs SNSXX is interesting because they are nearly identical from a risk and return perspective, but the taxation is very different. SNOXX primarily owns Treasury repurchase agreements (repos), while SNSXX owns actual Treasuries outright (which are exempt from state tax).

SNOXX vs SNSXX Historical Performance

Since their common inception, SNOXX has outperformed SNSXX by .16% annualized. This difference has compounded to a 1.01% difference over the past 5+ years. Currently the yield difference is only about .05%, so future performance differences may be roughly similar.

Current Yields for SNSXX & SNOXX

The current 7 day yield is a standardized yield metric for money market mutual funds and the 7 day yields for both SNOXX and SNSXX can be found on the fund’s webpages. See here for SNOXX and here for SNSXX.

What rate is SNOXX & SNSXX paying?

The current interest rate for SNOXX, SNSXX, and other Schwab money markets can be found on Schwab’s money market page.

SNOXX & SNSXX Details

The expense ratio is .34% for both SNOXX and SNSXX. Neither fund charges a load or 12b-1 fees.

Neither SNOXX nor SNSXX has a minimum investment and investors can invest as little as one cent.

I have not checked every brokerage, but SNOXX and SNSXX are generally only available to clients of Schwab.

Like most money market mutual funds, investors can sell SNOXX or SNSXX at any time.

SNOXX vs SNSXX Risks

Hypothetically, an investor could lose money with SNOXX or SNSXX, but I personally do not think that is a realistic risk as I believe the fund sponsor or the federal government would intervene if that were about to happen. Technically, it is possible to lose money in SNSXX or SNOXX though.

As of June 30, 2023, SNOXX’s portfolio was over $32 billion, while SNSXX was over $15 billion.

IS SNOXX or SNSXX FDIC Insured?

No, neither SNOXX nor SNSXX are FDIC insured.

Holdings

The two funds both invest in Treasury-related securities. However, most of SNOXX’s holdings are in Treasury repurchase agreements (96%), while 100% of SNSXX is in Treasuries that it owns outright. The historical performance and yields are nearly identical because Treasuries and Treasury repos are nearly identical.

Tax Considerations

SNOXX and SNSXX are Treasury funds which means that they invest in Treasuries and related debt instruments. However, taxable investors may find better after-tax yields in municipal (muni) money market funds, which offer tax benefits that may improve investors’ after-tax yield.

Treasuries and Treasury Money Markets

Treasuries are treated very differently than other money market assets (including Treasury repos) for tax purposes. Income from the Treasury repos (that SNOXX owns) is subject to state income tax. Income from Treasury bonds (that SNSXX owns) is exempt from state income tax. Therefore, SNSXX is generally a much better choice for any investor subject to state tax.

Muni Money Market Funds

Investors subject to higher tax rates may consider municipal (muni) money market funds due to the fact the interest is typically exempt from federal income tax (and often from state tax too!).

The caveat with muni money market funds though is that the yields can move up and down A LOT. Therefore, the stated yield that an investor looks up on any given day is not necessarily indicative of the future return. To understand why, read my post on muni money market yields.

Rather than expecting a muni money market fund’s stated yield, I encourage investors to expect the trailing average yield (over the past few weeks). Generally speaking, the after tax returns of munis will only be higher than non-muni money markets for those in the highest tax brackets.

High Balances

Investors allocating more than $1 million may want to consider the “ultra” share class of these funds, whose symbols are SCOXX (similar to SNOXX) and SUTXX (similar to SNSXX).

Is SNOXX or SNSXX a Better Fund?

As mentioned above, the funds are nearly identical. For investors who live in states with no state income tax or those investing in tax-deferred or tax-exempt accounts (such as IRAs, 401k’s, Roth accounts, etc), then SNOXX has a slightly higher yield. However, nearly all of SNSXX’s income is exempt from state tax, so SNSXX’s after-tax yield is meaningfully higher for investors subject to state taxes.

Schwab’s UD Dividend ETF (SCHD) and JP Morgan’s Equity Premium ETF (JEPI) are two of the largest income-oriented ETFs in the marketplace today. SCHD generates income from dividend-paying stocks, while JEPI aims to generate an even higher level of income by selling calls (a covered call strategy). These are very different approaches to generating income and many investors may prefer one to the other. I will compare SCHD vs JEPI below and highlight the main differences.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

The primary difference between the funds is that SCHD is a traditional dividend-oriented fund and JEPI pursues a covered call strategy. I would never recommend JEPI to an individual investor and would personally go with SCHD every time.

The Long Answer

Historical Performance: JEPI vs SCHD

SCHD was launched in 2011, while JEPI was launched in 2020. Since JEPI’s launch, it has underperformed SCHD by 3.29% annually (and this includes all dividends, so the after-tax difference is even larger). The cumulative performance differential over these past 3.5 years is approximately 14.5%. It has not been a great start for JEPI.

Differences between JEPI vs SCHD

The main difference between SCHD and JEPI is their strategy. Both funds generally invest in the US large-cap universe of stocks and are well-diversified. SCHD tilts towards dividend-paying stocks, while JEPI does not. Instead, JEPI sell index calls against its portfolio in order to generate income. In other words, it collects call option premiums. This strategy has its pros and cons, but covered call strategies are not well understood by many individual investors.

Geographic Exposure

Both SCHD and JEPI hold essentially 100% stocks, so I will not dig into country exposures or market classification here. For all intents and purposes, the two funds have identical exposures.

Market Cap Exposure

SCHD and JEPI have nearly identical market cap exposures. Due to market cap weighting, both funds are overwhelmingly influenced by the large-cap holdings though.

	SCHD	JEPI
Large-Cap	80%	83%
Mid-Cap	17%	16%
Small-Cap	4%	0%

Sector Weights

The sector weights between SCHD and JEPI are relatively similar, if we ignore the short call exposure.

	SCHD	JEPI
Basic Materials	1.96%	3.78%
Consumer Cyclical	9.45%	8.92%
Financial Services	14.97%	12.47%
Real Estate	0.00%	3.66%
Communication Services	4.37%	5.21%
Energy	9.54%	3.01%
Industrials	18.04%	13.59%
Technology	12.37%	17.27%
Consumer Defensive	12.71%	13.04%
Healthcare	16.27%	14.23%
Utilities	0.30%	4.80%

Expenses

The expense ratio for SCHD is .06%, while JEPI’s expense ratio is .35%. It’s a large difference in percentage terms, at nearly 6x more expensive. However, it’s “only” 29 basis points and strategy differences are a much bigger factor than differences in expenses.

Transaction Costs

ETFs are free to trade at many brokers and custodians, so both SCHD and JEPI should be free to trade in most cases. Additionally, these funds are among the largest ETFs and are very liquid. The bid-ask spread of SCHD is about .01% and JEPI is about .02%, so individual investor trades will not generally be large enough to “move” the market.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post). As expected, neither JEPI nor SCHD has ever made a capital gains distribution (nor do I expect them to).

JEPI is not very tax-efficient as the premiums received from selling calls are taxed at ordinary income rates. While some investors may not mind receiving income in lieu of potential upside, this is akin to converting capital gains (from appreciation) into ordinary income. Of course, a covered call strategy will lose less money if the market declines, but covered call strategies (including JEPI) have a large tax drag.

On the other hand, SCHD is about as tax-efficient as any dividend can be.

A Note on JEPI Premium Costs

Many retail investors focus on the premiums that are received from selling calls. However, investment returns need to calculated net of costs. If an investor sells a call for $3 and buys it back for $1, the return is $2 rather than $3. Of course, if the underlying stock goes up, an investor may have to buy the call back at $5 (as an example). Premium costs vary over time, so investors may want to evaluate total return rather than just premiums received.

Final Thoughts: JEPI vs SCHD

Both SCHD and JEPI are large, popular funds sponsored and managed by two of the largest asset managers in the world. SCHD and JEPI are quite different and historical performance has reflected these differences.

In my view, SCHD is undoubtedly better for most investors. I would never recommend JEPI to an individual investor due to the poor performance of covered call strategies and the tax drag.

Fidelity offers dozens of money market mutual funds, including many government and Treasury money market funds with similar sounding names. Two of the largest funds in the marketplace today are the Fidelity Government Money Market Fund (SPAXX) and the Fidelity Government Cash Reserves (FDRXX). Even though these are two of the largest government money market funds in the marketplace today, comparing SPAXX vs FDRXX may be confusing because both the names and underlying characteristics are extremely similar.

The Short Answer

Comparing SPAXX vs FDRXX is interesting because they are nearly identical from a risk and return perspective. Even the holdings of FDRXX and SPAXX are extremely similar. Personally, I consider these two funds identical and interchangeable.

SPAXX vs FDRXX Historical Performance

Since their common inception, SPAXX and FDRXX have nearly identical performance! The annualized difference is only .03%! Currently the two funds have a nearly identical yield too (.01% difference), so I expect the future returns to stay quite close. These funds could really not be more similar!

Current Yields for FDRXX & SPAXX

The current 7 day yield is a standardized yield metric for money market mutual funds and the 7 day yields for both SPAXX and FDRXX can be found on the fund’s webpages. See here for SPAXX and here for FDRXX.

What rate is SPAXX & FDRXX paying?

The current interest rate for SPAXX, FDRXX, and other Fidelity money markets can be found on Fidelity’s money market page.

SPAXX & FDRXX Details

The expense ratio is .42% for SPAXX and .40% for FDRXX. This .02% difference may account for most of the .03% annualized performance difference. Neither fund charges a load or 12b-1 fees.

Neither SPAXX nor FDRXX has a minimum investment and investors can invest as little as one cent.

I have not checked every brokerage, but SPAXX and FDRXX are generally only available to clients of Fidelity.

Like most money market mutual funds, investors can sell SPAXX or FDRXX at any time.

SPAXX vs FDRXX Risks

Hypothetically, an investor could lose money with SPAXX or FDRXX, but I personally do not think that is a realistic risk as I believe the fund sponsor or the federal government would intervene if that were about to happen. Technically, it is possible to lose money in FDRXX or SPAXX though.

As of July 31, 2023, SPAXX’s portfolio was over $275 billion, while FDRXX was nearly $218 billion.

IS SPAXX or FDRXX FDIC Insured?

No, neither SPAXX nor FDRXX are FDIC insured.

Holdings

The two funds both invest in government securities and the allocations are nearly identical. Below is a table of the top 3 holdings:

	FDRXX	SPAXX
US Government Repurchase Agreements (repos)	62.70%	62.95%
Agency Floating Rate Securities	18.47%	18.15%
US Treasury Bills	10.51%	10.15%

The historical performance and yields are nearly identical because the yields of government-backed debt tends to trade together.

Tax Considerations

Both SPAXX and FDRXX are government funds, which means that they invest in government securities. Investors subject to state tax should consider a “Treasury only” fund like FDLXX, since a much greater proportion of the income will be exempt from state tax. Also, taxable investors may find better after-tax yields in municipal (muni) money market funds, which offer tax benefits that may improve investors’ after-tax yield.

Treasuries and Treasury Money Markets

Treasuries are treated very differently than other money market assets (including government and Treasury repos) for tax purposes. Income from government repos (that SPAXX and FDRXX own) is subject to state income tax. Income from Treasury bonds is exempt from state income tax. Therefore, FDRXX and SPAXX may be a slightly better choice than a prime fund for any investor subject to state tax, although a Treasury-only fund would be even better (depending on yields).

Muni Money Market Funds

Investors subject to higher tax rates may consider municipal (muni) money market funds due to the fact the interest is typically exempt from federal income tax (and often from state tax too!).

The caveat with muni money market funds though is that the yields can move up and down A LOT. Therefore, the stated yield that an investor looks up on any given day is not necessarily indicative of the future return. To understand why, read my post on muni money market yields.

Rather than expecting a muni money market fund’s stated yield, I encourage investors to expect the trailing average yield (over the past few weeks). Generally speaking, the after tax returns of munis will only be higher than non-muni money markets for those in the highest tax brackets.

High Balances

Investors allocating more than $1 million to SPAXX may want to consider the lower-cost “premium class” share class which is FZCXX.

Is SPAXX or FDRXX a Better Fund?

As mentioned above, the funds are nearly identical and I consider the two fund interchangeable. I would not spend any more time attempting to split hairs here because they are basically the same. Investors subject to state tax may want to invest in a Treasury only fund like FDLXX though. Investors in high federal tax brackets may want to explore muni money market funds.

Fidelity offers dozens of money market mutual funds, including many with similar sounding names. Two of the largest funds in the marketplace today are the Fidelity Government Money Market Fund (SPAXX) and the Fidelity Money Market Fund (SPRXX). Comparing SPAXX vs SPRXX may be confusing because the name and fund details are similar, although there is one important difference.

The Short Answer

When comparing SPRXX vs SPAXX, the main difference is that SPRXX is a prime fund while SPAXX is a government fund. This means that SPAXX primarily owns government-backed securities, while SPRXX owns all types of assets. Therefore, SPRXX is theoretically riskier and generates a higher yield.

SPAXX vs SPRXX Historical Performance

Since their common inception, SPRXX has outperformed SPAXX by over .20% annualized. This has compounded to a 1.56% cumulative difference over the past 7 years. SPRXX currently yields .07% more than SPAXX, so I would expect this outperformance to continue. It is not uncommon for prime funds to outperform their non-prime counterparts.

Current Yields for SPRXX & SPAXX

The current 7 day yield is a standardized yield metric for money market mutual funds and the 7 day yields for both SPAXX and SPRXX can be found on the fund’s webpages. See here for SPAXX and here for SPRXX.

What rate is SPAXX & SPRXX paying?

The current interest rate for SPAXX, SPRXX, and other Fidelity money markets can be found on Fidelity’s money market page.

SPAXX & SPRXX Details

The expense ratio for both SPAXX and SPRXX is .42%. Neither fund charges a load or 12b-1 fees.

Neither SPAXX nor SPRXX has a minimum investment and investors can invest as little as one cent. Each fund has lower-cost share classes, which are mentioned below.

I have not checked every brokerage, but SPAXX and SPRXX are generally only available to clients of Fidelity.

Like most money market mutual funds, investors can sell SPAXX or SPRXX at any time.

SPAXX vs SPRXX Risks

Hypothetically, an investor could lose money with SPAXX or SPRXX, but I personally do not think that is a realistic risk as I believe the fund sponsor or the federal government would intervene if that were about to happen. Technically, it is possible to lose money in SPRXX or SPAXX though.

It is important to note that SPRXX is a prime fund and holds some non-government assets, which have been and are perceived to be riskier than government assets. So, again, hypothetically (and technically) SPRXX is the riskier of the two funds.

As of July 31, 2023, SPAXX’s portfolio was over $275 billion, while SPRXX was over $85 billion.

IS SPAXX or SPRXX FDIC Insured?

No, neither SPAXX nor SPRXX are FDIC insured.

Holdings

The two funds both invest in short-term securities, but SPAXX only invests in goernment-backed securities. As a prime fund, SPRXX invests in non-government debt like commercial paper and CDs. Most of SPAXX’s holdings are in government repurchase agreements (63%) and agency debt (18%) among other things. SPRXX holds 66% in government repurchase agreements and 15% in commercial paper, as well as smaller positions in other government and non-government assets.

Tax Considerations

SPAXX is a government fund, which means that it invests in government securities. SPRXX is a prime fund which means that it can invest in a wider variety of instruments. This means that SPAXX is a bit more tax-efficient for those who are subject to state taxes. However, investors subject to state tax should consider a “Treasury only” fund like FDLXX, since a much greater proportion of the income will be exempt from state tax. Also, taxable investors may find better after-tax yields in municipal (muni) money market funds, which offer tax benefits that may improve investors’ after-tax yield.

Treasuries and Treasury Money Markets

Treasuries are treated very differently than other money market assets (including Treasury repos) for tax purposes. Income from government repos (that both SPRXX and SPAXX own) is subject to state income tax. Income from Treasury bonds is exempt from state income tax. Therefore, SPRXX is generally a better choice for any investor subject to state tax, although a Treasury-only fund would be even better (depending on yields).

Muni Money Market Funds

Investors subject to higher tax rates may consider municipal (muni) money market funds due to the fact the interest is typically exempt from federal income tax (and often from state tax too!).

The caveat with muni money market funds though is that the yields can move up and down A LOT. Therefore, the stated yield that an investor looks up on any given day is not necessarily indicative of the future return. To understand why, read my post on muni money market yields.

Rather than expecting a muni money market fund’s stated yield, I encourage investors to expect the trailing average yield (over the past few weeks). Generally speaking, the after tax returns of munis will only be higher than non-muni money markets for those in the highest tax brackets.

High Balances

Investors allocating more than $100,000 may want to consider the “Premium” share class of SPAXX (which is FZCXX) or SPRXX (which is FZDXX)

Is SPAXX or SPRXX a Better Fund?

As mentioned above, SPRXX has outperformed in the past and I expect that to continue given the its higher yields. This higher yield comes from holding riskier investments and prime funds are theoretically riskier (I say theoretically because the federal government often intervenes if the financial system is at risk). However, some of of SPAXX’s income is exempt from state tax, so the after-tax yield is higher for investors subject to state taxes. These investors may want to invest in a Treasury only fund like FDLXX though, where they may be able to get both a higher after-tax yield and more safety.

Fidelity offers dozens of money market mutual funds, including many with similar sounding names. Two of the largest funds in the marketplace today are the Fidelity Government Money Market Fund (SPAXX) and the Fidelity Money Market Fund Premium Class (FZDXX). Comparing SPAXX vs FZDXX may be confusing because the name and fund details are similar, although there is one important difference.

The Short Answer

When comparing FZDXX vs SPAXX, the main difference is that FZDXX is a prime fund while SPAXX is a government fund. This means that SPAXX primarily owns government-backed securities, while FZDXX owns all types of assets. Therefore, FZDXX is theoretically riskier and generates a higher yield.

SPAXX vs FZDXX Historical Performance

Since their common inception, FZDXX has outperformed SPAXX by over .30% annualized. This has compounded to a 2.51% cumulative difference over the past 7 years. FZDXX currently yields nearly .20% more than SPAXX, so I would expect this outperformance to continue. It is not uncommon for prime funds to outperform their non-prime counterparts.

Current Yields for FZDXX & SPAXX

The current 7 day yield is a standardized yield metric for money market mutual funds and the 7 day yields for both SPAXX and FZDXX can be found on the fund’s webpages. See here for SPAXX and here for FZDXX.

What rate is SPAXX & FZDXX paying?

The current interest rate for SPAXX, FZDXX, and other Fidelity money markets can be found on Fidelity’s money market page.

SPAXX & FZDXX Details

The expense ratio is .42% for both SPAXX and .30% for FZDXX. Neither fund charges a load or 12b-1 fees.

SPAXX does not have a minimum investment and investors can invest as little as one cent, while FZDXX has a minimum investment of $100,000.

I have not checked every brokerage, but SPAXX and FZDXX are generally only available to clients of Fidelity.

Like most money market mutual funds, investors can sell SPAXX or FZDXX at any time.

SPAXX vs FZDXX Risks

Hypothetically, an investor could lose money with SPAXX or FZDXX, but I personally do not think that is a realistic risk as I believe the fund sponsor or the federal government would intervene if that were about to happen. Technically, it is possible to lose money in FZDXX or SPAXX though.

It is important to note that FZDXX is a prime fund and holds some non-government assets, which have been and are perceived to be riskier than government assets. So, again, hypothetically (and technically) FZDXX is the riskier of the two funds.

As of July 31, 2023, SPAXX’s portfolio was over $275 billion, while FZDXX was over $85 billion.

IS SPAXX or FZDXX FDIC Insured?

No, neither SPAXX nor FZDXX are FDIC insured.

Holdings

The two funds both invest in short-term securities, but SPAXX only invests in goernment-backed securities. As a prime fund, FZDXX invests in non-government debt like commercial paper and CDs. Most of SPAXX’s holdings are in government repurchase agreements (63%) and agency debt (18%) among other things. FZDXX holds 66% in government repurchase agreements and 15% in commercial paper, as well as smaller positions in other government and non-government assets.

Tax Considerations

SPAXX is a government fund, which means that it invests in government securities. FZDXX is a prime fund which means that it can invest in a wider variety of instruments. This means that SPAXX is a bit more tax-efficient for those who are subject to state taxes. However, investors subject to state tax should consider a “Treasury only” fund like FDLXX, since a much greater proportion of the income will be exempt from state tax. Also, taxable investors may find better after-tax yields in municipal (muni) money market funds, which offer tax benefits that may improve investors’ after-tax yield.

Treasuries and Treasury Money Markets

Treasuries are treated very differently than other money market assets (including Treasury repos) for tax purposes. Income from government repos (that both FZDXX and SPAXX own) is subject to state income tax. Income from Treasury bonds is exempt from state income tax. Therefore, FZDXX is generally a better choice for any investor subject to state tax, although a Treasury-only fund would be even better (depending on yields).

Muni Money Market Funds

Investors subject to higher tax rates may consider municipal (muni) money market funds due to the fact the interest is typically exempt from federal income tax (and often from state tax too!).

The caveat with muni money market funds though is that the yields can move up and down A LOT. Therefore, the stated yield that an investor looks up on any given day is not necessarily indicative of the future return. To understand why, read my post on muni money market yields.

Rather than expecting a muni money market fund’s stated yield, I encourage investors to expect the trailing average yield (over the past few weeks). Generally speaking, the after tax returns of munis will only be higher than non-muni money markets for those in the highest tax brackets.

High Balances

Investors allocating more than $100,000 may want to consider the “Premium” share class of SPAXX, which is FZCXX.

Investors allocating less than $100,000 may not be able to buy FZDXX, but may consider SPRXX.

Is SPAXX or FZDXX a Better Fund?

As mentioned above, FZDXX has outperformed in the past and I expect that to continue given the its higher yields. This higher yield comes from holding riskier investments and prime funds are theoretically riskier (I say theoretically because the federal government often intervenes if the financial system is at risk). However, some of of SPAXX’s income is exempt from state tax, so the after-tax yield is higher for investors subject to state taxes. These investors may want to invest in a Treasury only fund like FDLXX though, where they may be able to get a higher after-tax yield and more safety.

Fidelity offers dozens of money market mutual funds, including many government and Treasury money market funds with similar sounding names. Two of the largest funds in the marketplace today are the Fidelity Government Money Market Fund (SPAXX) and the Fidelity Treasury Money Market Fund (FZFXX). Comparing SPAXX vs FZFXX may be confusing because the name and fund details are nearly identical, although there is one important difference.

The Short Answer

Comparing SPAXX vs FZFXX is interesting because they are nearly identical from a risk and return perspective, but the taxation is very different. SPAXX primarily owns government-backed repurchase agreements (repos), while FZFXX owns Treasury repos. It is a very slight difference and investor may actually want to consider a Treasury only fund like FDLXX for the tax benefits.

SPAXX vs FZFXX Historical Performance

Since their common inception, SPAXX and FZFXX have identical performance! Currently the two funds have an identical yield too. These funds could really not be more similar!

Current Yields for FZFXX & SPAXX

The current 7 day yield is a standardized yield metric for money market mutual funds and the 7 day yields for both SPAXX and FZFXX can be found on the fund’s webpages. See here for SPAXX and here for FZFXX.

What rate is SPAXX & FZFXX paying?

The current interest rate for SPAXX, FZFXX, and other Fidelity money markets can be found on Fidelity’s money market page.

SPAXX & FZFXX Details

The expense ratio is .42% for both SPAXX and FZFXX. Neither fund charges a load or 12b-1 fees.

Neither SPAXX nor FZFXX has a minimum investment and investors can invest as little as one cent.

I have not checked every brokerage, but SPAXX and FZFXX are generally only available to clients of Fidelity.

Like most money market mutual funds, investors can sell SPAXX or FZFXX at any time.

SPAXX vs FZFXX Risks

Hypothetically, an investor could lose money with SPAXX or FZFXX, but I personally do not think that is a realistic risk as I believe the fund sponsor or the federal government would intervene if that were about to happen. Technically, it is possible to lose money in FZFXX or SPAXX though.

As of July 31, 2023, SPAXX’s portfolio was over $275 billion, while FZFXX was nearly $5 billion.

IS SPAXX or FZFXX FDIC Insured?

No, neither SPAXX nor FZFXX are FDIC insured.

Holdings

The two funds both invest in government securities, but FZFXX only invests in Treasury-related securities (versus other government securities like agency debt, etc). Most of SPAXX’s holdings are in government repurchase agreements (63%) and agency debt (18%) among other things. FZFXX holds 80% in Treasuries repurchase agreements (rather than repos of other federally-backed bonds). The historical performance and yields are nearly identical because the yields of government-backed debt tends to trade together.

Tax Considerations

SPAXX is a government fund, which means that it invests in government securities. FZFXX is a Treasury fund which means that it only invest in Treasury-related debt instruments. This means that FZFXX is a bit more tax-efficient for those who are subject to state taxes. However, investors subject to state tax should consider a “Treasury only” fund like FDLXX, since a much greater proportion of the income will be exempt from state tax. Also, taxable investors may find better after-tax yields in municipal (muni) money market funds, which offer tax benefits that may improve investors’ after-tax yield.

Treasuries and Treasury Money Markets

Treasuries are treated very differently than other money market assets (including Treasury repos) for tax purposes. Income from government repos (that SPAXX owns) is subject to state income tax. Income from Treasury bonds is exempt from state income tax. Therefore, FZFXX is generally a better choice for any investor subject to state tax, although a Treasury-only fund would be even better (depending on yields).

Muni Money Market Funds

Investors subject to higher tax rates may consider municipal (muni) money market funds due to the fact the interest is typically exempt from federal income tax (and often from state tax too!).

The caveat with muni money market funds though is that the yields can move up and down A LOT. Therefore, the stated yield that an investor looks up on any given day is not necessarily indicative of the future return. To understand why, read my post on muni money market yields.

Rather than expecting a muni money market fund’s stated yield, I encourage investors to expect the trailing average yield (over the past few weeks). Generally speaking, the after tax returns of munis will only be higher than non-muni money markets for those in the highest tax brackets.

High Balances

Investors allocating more than $1 million may want to consider the “Premium” or “Class I” share class of these funds, whose symbols are FZCXX (similar to SPAXX) and FISXX (similar to FZFXX).

Is SPAXX or FZFXX a Better Fund?

As mentioned above, the funds are nearly identical. For investors who live in states with no state income tax or those investing in tax-deferred or tax-exempt accounts (such as IRAs, 401k’s, Roth accounts, etc), then it doesn’t really matter which fund is used. However, some of of FZFXX’s income is exempt from state tax, so the after-tax yield is higher for investors subject to state taxes. These investors may want to invest in a Treasury only fund like FDLXX though.

Fidelity offers dozens of money market mutual funds, including many government and Treasury money market funds with similar sounding names. Two of the largest funds in the marketplace today are the Fidelity Government Money Market Fund (FZCXX) and the Fidelity Treasury Only Money Market Fund (FDLXX). Comparing FZCXX vs FDLXX may be confusing because the name and fund details are nearly identical, although there is one important difference.

The Short Answer

Comparing FZCXX vs FDLXX is interesting because they are nearly identical from a risk and return perspective, but the taxation is very different. FZCXX primarily owns government-backed repurchase agreements (repos), while FDLXX owns actual Treasuries outright (which are exempt from state tax).

FZCXX vs FDLXX Historical Performance

Since their common inception, FZCXX has outperformed FDLXX by .10% annualized. That difference has compounded over time to a .78% cumulative difference over the past 7 years. Currently the yield difference is about .14%, so future performance may deviate further.

Current Yields for FDLXX & FZCXX

The current 7 day yield is a standardized yield metric for money market mutual funds and the 7 day yields for both FZCXX and FDLXX can be found on the fund’s webpages. See here for FZCXX and here for FDLXX.

What rate is FZCXX & FDLXX paying?

The current interest rate for FZCXX, FDLXX, and other Fidelity money markets can be found on Fidelity’s money market page.

FZCXX & FDLXX Details

The expense ratio is .42% for FDLXX and .32% for FZCXX, which accounts for the majority of the difference in yield and performance. Neither fund charges a load or 12b-1 fees.

FDLXX does not have a minimum investment and investors can invest as little as one cent, while FZCXX has a minimum investment of $100,000 although this can be waived in many situations.

I have not checked every brokerage, but FZCXX and FDLXX are generally only available to clients of Fidelity.

Like most money market mutual funds, investors can sell FZCXX or FDLXX at any time.

FZCXX vs FDLXX Risks

Hypothetically, an investor could lose money with FZCXX or FDLXX, but I personally do not think that is a realistic risk as I believe the fund sponsor or the federal government would intervene if that were about to happen. Technically, it is possible to lose money in FDLXX or FZCXX though.

As of July 31, 2023, FZCXX’s portfolio was over $275 billion, while FDLXX was nearly $5 billion.

IS FZCXX or FDLXX FDIC Insured?

No, neither FZCXX nor FDLXX are FDIC insured.

Holdings

The two funds both invest in government securities, but FDLXX only invests in Treasury securities. Most of FZCXX’s holdings are in government repurchase agreements (63%) and agency debt (18%) among other things. FDLXX holds 81% in Treasuries that it owns outright. The historical performance and yields are nearly identical because the yields of government-backed debt tends to trade together.

Tax Considerations

FZCXX is a government fund, which means that it invests in government securities. FDLXX is a Treasury fund which means that it only invest in Treasuries and related debt instruments. This means that FDLXX is much more tax-efficient for those who are subject to state taxes. Also, taxable investors may find better after-tax yields in municipal (muni) money market funds, which offer tax benefits that may improve investors’ after-tax yield.

Treasuries and Treasury Money Markets

Treasuries are treated very differently than other money market assets (including Treasury repos) for tax purposes. Income from government repos (that FZCXX owns) is subject to state income tax. Income from Treasury bonds is exempt from state income tax. Therefore, FDLXX is generally a much better choice for any investor subject to state tax.

Muni Money Market Funds

Investors subject to higher tax rates may consider municipal (muni) money market funds due to the fact the interest is typically exempt from federal income tax (and often from state tax too!).

The caveat with muni money market funds though is that the yields can move up and down A LOT. Therefore, the stated yield that an investor looks up on any given day is not necessarily indicative of the future return. To understand why, read my post on muni money market yields.

Rather than expecting a muni money market fund’s stated yield, I encourage investors to expect the trailing average yield (over the past few weeks). Generally speaking, the after tax returns of munis will only be higher than non-muni money markets for those in the highest tax brackets.

High Balances

Investors allocating more than $1 million to FDLXX may want to use the less expensive share class, whose symbol is FSIXX. Investors who cannot invest at least $100,000 in FZCXX may want to consider the more expensive share class SPAXX.

Is FZCXX or FDLXX a Better Fund?

As mentioned above, the funds are nearly identical. For investors who live in states with no state income tax or those investing in tax-deferred or tax-exempt accounts (such as IRAs, 401k’s, Roth accounts, etc), then FZCXX has a slightly higher yield. However, nearly all of FDLXX’s income is exempt from state tax, so the after-tax yield is meaningfully higher for investors subject to state taxes.

Fidelity offers dozens of money market mutual funds, including many government and Treasury money market funds with similar sounding names. Two of the largest funds in the marketplace today are the Fidelity Government Money Market Fund (SPAXX) and the Fidelity Treasury Only Money Market Fund (FDLXX). Comparing SPAXX vs FDLXX may be confusing because the name and fund details are nearly identical, although there is one important difference.

The Short Answer

Comparing SPAXX vs FDLXX is interesting because they are nearly identical from a risk and return perspective, but the taxation is very different. SPAXX primarily owns government-backed repurchase agreements (repos), while FDLXX owns actual Treasuries outright (which are exempt from state tax).

SPAXX vs FDLXX Historical Performance

Since their common inception, SPAXX and FDLXX have identical performance! Currently the yield difference is about .04%, so future performance may deviate more although 4 basis points is a miniscule difference.

Current Yields for FDLXX & SPAXX

The current 7 day yield is a standardized yield metric for money market mutual funds and the 7 day yields for both SPAXX and FDLXX can be found on the fund’s webpages. See here for SPAXX and here for FDLXX.

What rate is SPAXX & FDLXX paying?

The current interest rate for SPAXX, FDLXX, and other Fidelity money markets can be found on Fidelity’s money market page.

SPAXX & FDLXX Details

The expense ratio is .42% for both SPAXX and FDLXX. Neither fund charges a load or 12b-1 fees.

Neither SPAXX nor FDLXX has a minimum investment and investors can invest as little as one cent.

I have not checked every brokerage, but SPAXX and FDLXX are generally only available to clients of Fidelity.

Like most money market mutual funds, investors can sell SPAXX or FDLXX at any time.

SPAXX vs FDLXX Risks

Hypothetically, an investor could lose money with SPAXX or FDLXX, but I personally do not think that is a realistic risk as I believe the fund sponsor or the federal government would intervene if that were about to happen. Technically, it is possible to lose money in FDLXX or SPAXX though.

As of July 31, 2023, SPAXX’s portfolio was over $275 billion, while FDLXX was nearly $5 billion.

IS SPAXX or FDLXX FDIC Insured?

No, neither SPAXX nor FDLXX are FDIC insured.

Holdings

The two funds both invest in government securities, but FDLXX only invests in Treasury securities. Most of SPAXX’s holdings are in government repurchase agreements (63%) and agency debt (18%) among other things. FDLXX holds 81% in Treasuries that it owns outright. The historical performance and yields are nearly identical because the yields of government-backed debt tends to trade together.

Tax Considerations

SPAXX is a government fund, which means that it invests in government securities. FDLXX is a Treasury fund which means that it only invest in Treasuries and related debt instruments. This means that FDLXX is much more tax-efficient for those who are subject to state taxes. Also, taxable investors may find better after-tax yields in municipal (muni) money market funds, which offer tax benefits that may improve investors’ after-tax yield.

Treasuries and Treasury Money Markets

Treasuries are treated very differently than other money market assets (including Treasury repos) for tax purposes. Income from government repos (that SPAXX owns) is subject to state income tax. Income from Treasury bonds is exempt from state income tax. Therefore, FDLXX is generally a much better choice for any investor subject to state tax.

Muni Money Market Funds

Investors subject to higher tax rates may consider municipal (muni) money market funds due to the fact the interest is typically exempt from federal income tax (and often from state tax too!).

The caveat with muni money market funds though is that the yields can move up and down A LOT. Therefore, the stated yield that an investor looks up on any given day is not necessarily indicative of the future return. To understand why, read my post on muni money market yields.

Rather than expecting a muni money market fund’s stated yield, I encourage investors to expect the trailing average yield (over the past few weeks). Generally speaking, the after tax returns of munis will only be higher than non-muni money markets for those in the highest tax brackets.

High Balances

Investors allocating more than $1 million may want to consider the “Premium” or “Class I” share class of these funds, whose symbols are FZCXX (similar to SPAXX) and FSIXX (similar to FDLXX).

Is SPAXX or FDLXX a Better Fund?

As mentioned above, the funds are nearly identical. For investors who live in states with no state income tax or those investing in tax-deferred or tax-exempt accounts (such as IRAs, 401k’s, Roth accounts, etc), then SPAXX has a slightly higher yield. However, nearly all of FDLXX’s income is exempt from state tax, so the after-tax yield is meaningfully higher for investors subject to state taxes.