Finance

Vanguard has been a big part of building my net worth, and I’m always watching to see if they are keeping the culture. Barron’s last week ran the article Vanguard Conquered the ETF World. Where It’s Aiming Next, but it’s probably behind a paywall. Well, the three main areas are high-yield cash savings accounts, financial advice, and fixed-income investing. Let’s explore them all a bit.

Financial advice. I find this the most interesting area of change. Can Vanguard find a way to provide high-quality advice to the masses at a low cost? They have gathered a lot of assets into what they have built already, even though I don’t see it as a high-quality tool yet. Too rigid, and too pricey for what you get.

Vanguard just announced that they are acquiring Altruist, a start-up firm supporting independent financial advisors, for over $4 billion (WSJ gift article, official Vanguard press release). A big move by new CEO Ramji.

“Altruist’s mission to make financial advice more accessible, more affordable, and help advisers scale their practices, that very much rhymes with what we’re trying to do here at Vanguard,” Ramji said. “That’s really how this acquisition was born.”

Will Vanguard work more directly with independent advisors now? Will they successfully incorporate all this new technology and AI stuff into their in-house advice platform? Will it be a shocking amount cheaper than the competition, spreading the “Vanguard Effect” to portfolio management?

High-yield cash savings. I opened a Vanguard Cash Plus Account a while back, but so far it’s been sitting empty. The current yield is 3.35% APY as of 8/24/26, which is okay in the world of online savings accounts but not special. I know it’s FDIC-insured, but personally I feel equally as safe with a Vanguard money market fund, especially those that are 99%+ made of US Treasuries. The Barron’s article suggests that the main purpose for Cash Plus seems to be to draw in new customers that don’t already have a Vanguard brokerage account.

The current 7-day SEC yield (as of 8/24/26) on the default brokerage sweep is Vanguard Federal Money Market Fund (VMFXX) is 3.62% with a compound yield of 3.68% (best comparison to APY). I can do even better with Vanguard Treasury Money Market Fund (VUSXX), which is exempt from state income taxes. There’s also now Vanguard 0-3 Month Treasury Bill ETF (VBIL, see below). All of these options are better than Cash Plus.

Will Vanguard expand back into cash management and checking again? Maybe it’s best they don’t.

Fixed-income investing. This also makes sense, especially with a higher yield environment making people branch out to various bond segments, as with fixed income the easiest way to get a higher return without taking on more risk is to simply lower the expense ratio. The math just maths, for both cash and bonds.

Vanguard’s active bond funds charge an average annual fee of 0.10%, compared with an industry average of 0.45% (excluding Vanguard funds), according to data from Morningstar. And 83% of Vanguard active bond funds beat peer 10-year average returns, according to Morningstar.

VBIL has closed its bid/ask spread gap with SGOV and is now also at 0.01%. So you can trade it easily with minimal loss whenever you want a cash sweep option in any brokerage. On top of that, VBIL expense ratio was lowered 0.06%, while SGOV is still at 0.09%. VBIL is the new SGOV replacement in all my various brokerage spaces.

One of the company’s biggest fund launch success stories is the Vanguard 0-3 Month Treasury Bill ETF (ticker: VBIL), which reached $5 billion in assets less than a year after debuting in February 2025. That makes it the fastest-growing Vanguard ETF—fixed income or equity. Devereux notes that as VBIL grew, the company took a page from its traditional playbook and cut the expense ratio from 0.07% to 0.06%. It’s an example, she says, of how, while a lot is changing at Vanguard, “our core mission and focus on clients aren’t.”

Groupon has brought back their limited-time deal on new Costco Gold Star or Executive Memberships. There are two options.

$65 for Gold Star Membership Package

• 1-year Gold Star Membership (normally $65 by itself)
• Membership card for the Primary Cardholder and one additional Household Card for anyone living at the same address, over the age of 18.
• $40 Digital Costco Shop gift card Valid in-store and online. The Digital Costco Shop Card will be emailed within two weeks of sign-up.

$130 for Executive Membership Package

• 1-year Executive Membership (normally $130 by itself). Executive membership includes an annual 2% reward (up to $1,250) on eligible Costco and Costco Travel purchases.
• Executive membership now also includes early shopping hours from 9 a.m.
• Membership card for the Primary Cardholder and one additional Household Card for anyone living at the same address, over the age of 18.
• $40 Digital Costco Shop gift card Valid in-store and online. The Digital Costco Shop Card will be emailed within two weeks of sign-up.

They’ve made it a bit more restrictive in that both the Primary and Household/Affiliate member must not have had a membership in the last 18 months. I know that some people like to alternate between a Costco and Sam’s Club membership.

Valid only for new members and those whose previous memberships (Primary and Affiliate) have been expired for at least 18 months or more. Not valid for renewal or upgrade of an existing membership.

Save even more on your Groupon with a cashback shopping portal. The Rakuten $50 bonus now excludes the Costco offer, but others are actually paying an increased bonus. For example, BeFrugal has a $10 bonus when you join as a new member and earn $10 in rewards, plus 8% cash back on this Costco Groupon offer. If you buy the $130 offer, 8% of $130 is $10.40, enough to trigger the bonus.

In this Morningstar market brief, it is revealed that the average self-directed Vanguard investor (7 million accounts!) held an asset allocation of 65% stocks, 24% cash, and 10% bonds. That’s a lot more cash than I expected as well.

Then this WSJ article comes up, Wealth Management Has a $3 Trillion Problem: Investors Are Keeping Too Much Cash (gift article). A self-directed investor and former pilot is profiled that keeps 85% in stocks and 15% in a “a money-market fund yielding 3.62%”, which suggests a Vanguard money market fund or another very-low cost money market.

He is keeping 85% of his portfolio in stocks and the rest in a money-market fund yielding 3.62%. Ross looked at historical bear markets and determined they typically don’t last longer than three years. He keeps enough of his portfolio in cash to comfortably get himself through that period, and he sells stocks when he needs to replenish his cash pile.

The rest of the article is about financial advisors thinking this is wrong and suggesting all sorts of alternatives, from muni bonds to private credit to buffer ETFs.

Now wealth and asset managers, eager to prove their worth and in many cases earn more fees, are trying to persuade investors to put it to work. Search for the phrase “too much cash” and you will find numerous articles penned by the likes of JPMorgan Chase and Charles Schwab, warning about the risk of being underinvested.

I found myself siding with the pilot. Maybe an alternative bond fund would give you a slightly higher yield, but the yield curve right now is still not very steep. As long as you are smart with your cash holdings (“cash sort”) and avoid crappy default sweep options with low yield from brokerages (like *cough*, JPMorgan Chase at 0.01% and Charles Schwab at 0.01%!) and instead buying SGOV, VBIL, or a Vanguard money market fund, you won’t be losing that much to a riskier bond alternative. Perhaps that is also partially why the cash allocation of Vanguard investors is so high. Their money market funds are quite good.

Switching to other bonds types can be fine, but be aware of the additional risk you are accepting for that higher yield. You may be taking on principal risk (buffer ETFs can lose money), duration risk (longer-term bonds can lose money), credit risk, or liquidity risk (private credit may limit withdrawals).

Finally, cash is simply a very safe, very short-term bond. Bonds are broken down by maturity, and Treasury bills with under 30 days of maturity are considered cash (“cash equivalents”). I see nothing wrong with taking your risk with stocks and keeping your “bonds” the safest flavor of bonds possible.