Vanguard adds record $305 billion in 2016

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 19, 2017
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.

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