iShares dominating ETF inflows for 2017

Vanguard is in second place, with all other competitors falling far behind

Sep 13, 2017 @ 1:29 pm

By John Waggoner

In the battle for ETF dollars, iShares is breaking through the front lines.

BlackRock's iShares saw an estimated net $9.1 billion in new money in August, according to Morningstar estimates, beating rival Vanguard's inflow of $8.7 billion. For the year, iShares has welcomed $140.9 billion in net new cash, versus $94.4 billion for Vanguard.

Virtually all other players in the field are so far behind you'd need binoculars to see them. State Street, sponsor of SPDR ETFs, saw $46.5 billion in net new money this year. Charles Schwab & Co., in fourth place for 2017, saw $18.2 billion in new cash.

In the battle for assets, Vanguard and iShares are extraordinarily well-positioned.

"The two of them are taking market share in a growing pie," said Todd Rosenbluth, senior director of ETF and mutual fund research at CFRA. "That's all the more impressive given the number of newer entrants in the marketplace and the fact that fees are coming down."

iShares is doing well in both its core products and its diverse suite of international products. Its iShares Core S&P 500 ETF (IVV), for example, saw $2.1 billion in net new inflows in August, the most of any ETF. Vanguard Total Stock Market ETF (VTI) and Vanguard S&P 500 ETF (VOO) didn't make the top 10 inflows for August. Vanguard Developed Markets Index (VEA), however, did arrive in second place with $2 billion in inflows.

So far this year, iShares has six of the top 10 best-selling ETFs and Vanguard has four. The biggest loser is SPDR S&P 500 ETF (SPY), which watched $3.2 billion hit the exits. The fund still clocks in at $247.3 billion in assets, and big asset flows in and out aren't unusual. NASDAQ reported a $4.6 billion inflow to the fund last week alone.

The public's love of taxable bonds shines through in this month's ETF flows.

Taxable bond ETFs saw $8.3 billion in net new cash in August, nearly as much as the $8.9 billion that went to U.S. equity ETFs. But there are just 259 taxable bond ETFs, versus 396 U.S. equity ETFs.

"The trend toward the relative safety of bond products, given the recent geopolitical risks and, most recently, concerns about hurricanes, continues," Mr. Rosenbluth said.

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