Looking to park EF to Vanguard High Yield

[tripods68]

We need to park round 80% or 20K of our EF to get higher interest/dividends payout than its currently earning (less .25%) at the moment which is pathetic. But I made the effort finally to do some research for past weeks to scour the universe. After an extensive research, I found (VWEHX) to be a very attractive buy. So I run a little spreadsheet for the past year-a-half and its monthly dividend distributions would be the monthly payout for 20K investment. What's even more attractive to me is how low its expense ratio (.28%) for this fund.

So I'd like your opinion before we pull the trigger. BTW, we are still keeping around $4K on-hand through our MMA account in case something come up for emergency. More importantly, we'll add more (between 1000 to 1500K) each pay period to MMA until we hit the magic number ($40K EF balance).

Vanguard High-Yield Corporate Fund Investor Shares (VWEHX).

"Vanguard
Corporate High Yield" "Monthly
Distribution" Payable Price Yield Invested INT PMT
Dividend $0.03353 5/2/2011 $5.86 7.00% 20,000.00 $114.44
Dividend $0.03649 4/1/2011 $5.80 7.40% 20,000.00 $125.83
Dividend $0.03253 3/1/2011 $5.82 7.30% 20,000.00 $111.79
Dividend $0.03432 2/1/2011 $5.78 7.03% 20,000.00 $118.75
Dividend $0.03468 1/3/2011 $5.70 7.19% 20,000.00 $121.68
Dividend $0.03379 12/1/2010 $5.66 7.14% 20,000.00 $119.40
Total $711.89

Dividend $0.03531 11/1/2010 $5.79 7.22% 20,000.00 $121.97
Dividend $0.03399 10/1/2010 $5.70 7.32% 20,000.00 $119.26
Dividend $0.03564 9/1/2010 $5.58 7.51% 20,000.00 $127.74
Dividend $0.03615 8/2/2010 $5.60 7.71% 20,000.00 $129.11
Dividend $0.03540 7/1/2010 $5.45 7.96% 20,000.00 $129.91
Dividend $0.03755 6/1/2010 $5.39 8.08% 20,000.00 $139.33
Dividend $0.03577 5/3/2010 $5.62 7.78% 20,000.00 $127.30
Dividend $0.03701 4/1/2010 $5.56 7.88% 20,000.00 $133.13
Dividend $0.03268 3/1/2010 $5.45 7.85% 20,000.00 $119.93
Dividend $0.03562 2/1/2010 $5.48 7.61% 20,000.00 $130.00
Dividend $0.03798 1/4/2010 $5.47 8.24% 20,000.00 $138.87
Dividend $0.03495 12/1/2009 $5.36 7.92% 20,000.00 $130.41
TOTAL $1,546.95

We'll accumulate by reinvesting monthly dividends so we won't be touching any of it.

[bjl584]

I have part of my EF in something similar. (THICX) Thornburg Limited Term Income Fund. I've been quite happy with it thus far (about 6 months and counting.)


04/29/2011 13.26 0.0000 0.0000 0.0359 0.0359
03/31/2011 13.14 0.0000 0.0000 0.0364 0.0364
02/28/2011 13.13 0.0000 0.0000 0.0385 0.0385
01/31/2011 13.12 0.0000 0.0000 0.0375 0.0375
12/31/2010 13.09 0.0000 0.0000 0.0370 0.0370
Currency: USD

[Petunia 100]

Personally, I would not be comfortable at all parking 80% of my EF in a high yield fund. An EF should be low risk. Look at online savings accounts, you can get a little over 1% at Ally. If you want to buy some high yield ultra short bonds (which is what a high yield MMF is), do it with your investment dollars, not your EF.

[tripods68]

Personally, I would not be comfortable at all parking 80% of my EF in a high yield fund. An EF should be low risk. Look at online savings accounts, you can get a little over 1% at Ally. If you want to buy some high yield ultra short bonds (which is what a high yield MMF is), do it with your investment dollars, not your EF.

I could be park 50% of the fund to ultra AAA bonds like Ginnie Mae. It's something I'm considering as well.