Capital Preservation Option (Cash)

Capital preservation options are low-risk investments that may appeal to risk-averse investors, parents with children near college age, or those with children currently enrolled in college.

Capital Preservation Option Investment Objectives Asset Category Underlying Investments Investment Style/ Characteristics
Vanguard Money Market Option Show Details Seeks to provide current income while maintaining liquidity and stable share price of $1 Cash/Short-Term Investments Vanguard Federal Money Market Fund Invests in high-quality, short-term money market instruments Show Details

Vanguard Money Market Option (Cash/Short-Term Investments) - Investment Strategy

The Vanguard Money Market Option invests 100% of its assets in Vanguard Federal Money Market Fund, which invests primarily in high-quality, short-term money market instruments issued by the U.S. government and its agencies and instrumentalities. Although these securities are high quality, most of the securities held by the fund are neither guaranteed by the U.S. Treasury nor supported by the full faith and credit of the U.S. government. The fund maintains a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less.

Under the new money market reforms, government money market funds are required to invest at least 99.5% of their total assets in cash, government securities, and/or repurchase agreements that are collateralized solely by government securities or cash (collectively, government securities). The ​fund generally invests 100% of its assets in government securities and therefore will satisfy the 99.5% requirement for designation as a government money market fund.

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CollegeAdvantage Offering Statement and Participation Agreement

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