Tim Buckley: Sarah, we’ve been talking a lot about cash and companies needing to hold more cash. I’m sure there are plenty individuals out there wondering how do we manage their cash? And you’re responsible for our taxable money markets, so why don’t you share how we conservatively manage their cash.
Sara Devereux: That’s right. So as you know, we have a very conservative strategy when it comes to our money market funds. First of all, the liquidity ratios that are required by regulators, we are well in excess of those ratios. Furthermore, we have a very conservative approach with asset selection. Within our Prime Fund, for example, nearly 50% of our assets are government securities.
Tim: If you want to get to all government…so if you really want the belt and suspenders approach, there’s always Federal and Treasury, right?
Sara: That’s right. In fact, we’ve seen large inflows into those funds.
Tim: For those people who want to be super conservative. The other thing is as we go towards a zero environment, the Fed has lowered rates. So you’re talking between 0 and 25 basis points as we go towards that low environment. Huge advantages for Vanguard there, right?
Sara: That’s right, due to our low expense ratios we’re still able to offer attractive deals with ample liquidity.