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Vanguard dominates rival ETFs, raising 5x more money than any other issuer in January

Vanguard dominates rival ETFs, raising 5x more money than any other issuer in January

Vanguard, the world’s second-largest asset manager’s exchange-traded funds (ETFs), experienced large inflows in January 2022 amid widespread market volatility.

According to Bloomberg’s senior ETF analyst Eric Balchunas, Vanguard received more than five times more cash in January than any other ETF provider. Whatsmore the analyst highlighted in net terms, the increased inflow contributes 87% of total year-to-date cash flow.

This Balchunas noted is due to the bearish sentiment that has prevailed in the market over the past month. Regarding market share in the fund sector, he said that Vanguard does well in bull markets, but “bear markets are great” for the industry.

The senior ETF analyst wrote on Twitter:

“Vanguard took in >5x more cash than any other ETF issuer in January. On a net basis they account for 87% YTD flows. When it comes to fund industry market share, bull markets are good for Vgrd but bear markets are great.”

U.S. Issuer Total Flow ($Millions). Source: Eric Balchunas

Why are Vanguard ETFs experiencing such inflows?

When it comes to low-cost investing and trading stocks, the investment advisory firm Vanguard is recognized as one of the undisputed leaders for long-term investors and those saving for their retirement.

Head of Vanguard Personal Investor in Australia, Balaji Gopal, recently said:

“The kind of investors we want to attract are not those who trade excessively, but those who want to build wealth the Vanguard way via simplification, diversification, and low-cost good investing habits.” 

Given the fact that the markets have lately been flirting with a correction, it should come as no surprise that more people are considering investing in long-term ETFs.

In contrast, Balchunas said that iShares “bond ETFs are bleeding bad,” indicating that although they will see their share of inflows over time, they are far more susceptible to sentimental, market-related short-term outflows than Vanguard.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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