The fund news of the morning across the nation's newspapers is that Vanguard is adding new restrictions on its funds to discourage market timers. In other words, it is a slow news day.

Vanguard's hometown paper, the Philadelphia Inquirer, quotes Burt Greenwald (a Philadelpian also) that the move reflects on Vanguard's fundementals.

"It goes back to their religious principle that everyone should be a long-term investor," Greenwald is quoted as saying. The paper also quotes a Vanguard spokesperson as explaining that the new rules will be easier to enforce and explain than the current rules.

On its Website, Vanguard explained that frequent trades raise the costs of running the fund for all investors.

The current rules apparently allow investors to make unlimited round trip trades, providing that those trades do not disrupt the funds' operations. Vanguard also levies holding-period-based redemption fees for some funds.

Meanwhile, the Wall Street Journal goes into more depth on the actual changes. It also notes that the rules will apply to 401(k) investors, but with some exceptions.

Under the new rules, shareholders will not be able to purchase shares in a fund within 60 days of selling shares in the same fund. However, an exception will be made for shareholders who repurchase shares with a mailed check. Vanguard's money market funds and VIPER ETFs are exempt from the rule.

Vanguard informed shareholders of the change as part of its June 30 account statement mailing.  

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