Volatility and Money Market Funds

These definitely are unprecedented, trying times, especially on our savings and retirement. And especially if not only have your equity funds or positions have had their value slashed like the Amazon jungle, but you notice even your boring, plodding money market fund is suddenly losing value today! Many money market funds are "breaking the buck"-- meaning, their dipping below their NAV of $1 / share!

http://www.bloomberg.com/apps/news?pid=20601087&sid=aLwxHK3Ygc8s&refer=home

In comes the Vanguard Prime Money Market Fund. Vanguard released this reassuring statement today about its MMF's composition and relative soundness vs. other Money Market Funds:

"
Our largest money market fund is Vanguard Prime Money Market Fund, which currently holds more than half of its assets in U.S. Treasury and federal agency securities. In addition, Prime Money Market Fund has no exposure to money market instruments issued by securities dealers, including Lehman Brothers. It also has no exposure to securities of AIG, the insurance concern that is being supported by loans from the federal government.
"

Feel free to read about it here.

The Prime Money Market Fund makes up 21.79% of the Retiree Portfolio.

Similarly, Fidelity has posted a disclosing FAQ about the security of their money-market fund as well here.