Vanguard said on Wednesday it will reopen its Treasury money market mutual fund to all investors, citing improved market conditions.

The biggest U.S. mutual fund company, based in Valley Forge, Pennsylvania, closed the $9.1 billion fund in January 2009 in an effort to shield existing fund holders from high levels of cash flow that could potentially dilute its yield.

The move to close the Treasury money fund followed the Federal Reserve's decision in December 2008 to lower short-term interest rates to near zero at the height of the global financial crisis.

Last month, the U.S. central bank raised its target range on short-term rates to 0.25-0.50 percent from zero to 0.25 percent, citing an improving domestic labor market.

Yields on most Treasury money funds are still running close to zero even after the Fed's first rate hike in nearly a decade, according to iMoneynet.

Analysts said yields on money market funds will unlikely rise much for now as fund operators seek to recoup costs spent to operate the funds and to maintain their yields above zero.

The reopening of Vanguard's Treasury money fund came more than six months after it reopened its $4.8 billion federal money market fund to all investors.

Vanguard's Treasury money fund invests primarily in U.S. government debt, while its federal money funds invests mainly in short-term securities issued by federal agencies including Fannie Mae and Freddie Mac.