Vanguard adds record $305 billion in 2016

While most of the money went into index funds, $50 billion flowed into active funds that buy bonds or a mix of stocks and bonds

Jan 6, 2017 @ 11:11 am

By Bloomberg News

Vanguard Group, the world's largest mutual fund manager, said it attracted a record $305 billion last year — an annual total that some firms need decades to reach.

Vanguard's take, which tops the firm's previous record of $276.4 billion in 2015, includes $93 billion that went into exchange-traded funds, up from $76 billion the year before, spokesman John Woerth wrote in an e-mail. While the bulk of the money flowed into products that track indexes, more than $50 billion was absorbed by active funds that buy bonds or a mix of stocks and bonds, Mr. Woerth said.

Eaton Vance Corp., a medium-sized money manager founded in 1979, had $336 billion in assets under management as of Oct. 31.

Vanguard is prospering at a time when other money managers are struggling to hold on to investor cash. Thirty of the 50 largest mutual fund firms suffered net redemptions in the first 11 months of the year, according to data from Morningstar Inc. Funds run by managers who pick stocks and bonds had outflows of $286 billion in the first 11 months while investors added $428.6 billion to passive mutual funds and ETFs.

BlackRock Inc., the world's largest money manager, is also benefiting from the shift to passive investing. The firm had about $93 billion in long-term flows, which doesn't include money market products, in the first three quarters of 2016, according to filings. That compares with $278 billion for Vanguard's long-term flows for the full year.

BlackRock reported on Jan. 3 that it attracted $107 billion to its U.S. ETFs in 2016 and an additional $32 billion to its European products. Globally, net inflows into ETFs reached $375 billion last year, surpassing the previous year's $348 billion. The vast majority of ETFs track indexes.


What do you think?

View comments

Recommended for you

Featured video


What it took to win an Excellence in Diversity & Inclusion Award

Editor Fred Gabriel and special projects editor Liz Skinner explain how InvestmentNews chose the winners of our inaugural Excellence in Diversity & Inclusion Awards.

Latest news & opinion

10 highest paid professions in America today

These are the top-paying jobs in the U.S., according to Glassdoor.

Ameriprise to pay $4.5 million to settle SEC charges that five reps stole more than $1 million from clients

Agency censures firm for not protecting clients from thieving brokers.

SEC slaps Lockwood with $200,000 fine over unseen trading costs to clients

Clients were forced to pay fees in addition to the usual wrap charges, the regulator maintains.

Gotcha! 10 lessons from brokers gone bad

These cases show why regulators nabbed reps and firms, and how to avoid their fate.

Tax-credit investigation may trip up Wells Fargo

Justice Department is investigating bank's dealings in tax credits for low-income housing, sources say.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print