Vanguard wins ETF flow war as state street slips further behind


Vanguard Group is on track to beat BlackRock Inc in attracting ETF flows for the first time since 2013, with a record of US$194bil so far in 2020, according to data compiled by Bloomberg.

NEW YORK: There’s a new champion in the battle for bragging rights atop the US$5.3 trillion exchange-traded fund industry, while a familiar laggard is seeing its slice of the US market shrink toward a record low.

Vanguard Group is on track to beat BlackRock Inc in attracting ETF flows for the first time since 2013, with a record of US$194bil so far in 2020, according to data compiled by Bloomberg.

The world’s largest asset manager lured US$113bill, while State Street Corp. was a distant third place, with US$32bil.

The Boston-based firm’s market share is poised to drop for a fifth straight year after a US$29bil exodus from its crown jewel – the US$324bil SPDR S&P 500 ETF Trust.

In a year that saw a pandemic send shockwaves through global financial markets, Vanguard and BlackRock have vaulted ahead of rivals in luring cash for their ETFs.

Both asset managers were helped in part by their popularity with financial advisers and their presence in model portfolios, which bundle funds into ready-made strategies. State Street hasn’t seen the same level of success given that fees are relatively high on some of its top funds, according to CFRA Research’s Todd Rosenbluth.

While SPY is among the most-profitable products partly due to its expense ratio of 0.095%, BlackRock’s US$234bil iShares Core S&P 500 ETF and the US$174bil Vanguard S&P 500 ETF each charge only 0.03%.

“As more retail and wealth management investors have joined the ETF market, State Street has missed out on a good chunk of those inflows, ” said Rosenbluth, CFRA’s head of mutual fund and ETF research.

“They were late to bring pricing down for products that are used as building blocks of investor portfolios.” — Bloomberg

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
   

Did you find this article insightful?

Yes
No

Next In Business News

MyEG posts RM75.5mil net profit in Q4
ANALYSIS: Top Glove bets on pandemic boom to propel ambitious US$1.9bil HK listing
Datasonic eyes Vietnam e-passport opportunity�
Yinson's unit bags RM1.5bil solar project in India�
Deloitte to pay RM324mil in settlement over 1MDB and SRC�
BIMB Investment launches Makmur myWakaf Fund
KLCI extends gains, closes 18 points higher
MISC’s ethane carrier Seri Everest delivers cargo in China
GlobalFoundries pours US$1.4b into fab expansion
Oil rises as U.S. vaccine progress raises demand expectations

Stories You'll Enjoy


Vouchers