Vanguard to Outgain BlackRock for Third Straight Year

October 05, 2022

The gap between the two largest exchange-traded fund issuers continues to narrow as Vanguard Group Inc. pulled in more money than BlackRock Inc. last quarter, and is now on pace to outgain its competitor for the third straight year. 

The world’s largest ETF issuer had $2.03 trillion in U.S.-listed ETF assets under management through its iShares offerings as of Oct. 4, while Vanguard had $1.76 trillion, according to ETF.com’s latest League Table

The $264 trillion that separates iShares and Vanguard is close to the narrowest on record and is down from the $311 trillion in June, when ETF.com last reported over the battle between the two ETF giants. In the third quarter, iShares’ ETFs gathered $26.2 billion of new assets, while Vanguard ETFs gathered $45.4 billion. On a year-to-date basis, Vanguard is ahead as well, with inflows of $148.9 billion versus $96.4 billion. 

 

($M) January February March April May June July August September
BlackRock -4,609 12,137 24,905 -9,840 34,061 13,610 15,013 4,685 6,463
Vanguard 22,141 34,431 20,628 -2,823 12,500 16,625 12,092 24,237 9,053

 

Inflows for Vanguard ETFs have outpaced those for iShares ETFs in each of the past three years. Prior to that, iShares’ inflows were routinely ahead of those of Vanguard. 

 

($M) BlackRock Vanguard
2022 YTD 96,425 148,883
2021 208,799 325,714
2020 121,294 199,918
2019 117,579 104,083
2018 134,266 84,757
2017 203,034 139,398
2016 105,597 94,810
2015 105,248 75,655

 

Gunning for the Crown  

The data suggests that Vanguard is on track to steal the ETF asset crown from iShares sometime in the next several years—if current trends persist. Of course, BlackRock likely won’t give away the No. 1 position it’s held for over a decade without a fight, though it’s a wonder what the firm can do to stem the tide.  

Many of iShares’ top ETFs are dirt cheap and on par in terms of cost with comparable funds from Vanguard. It also has a much more comprehensive set of ETF offerings compared with Vanguard—385 versus 82. 

On the other hand, Vanguard’s investor-friendly reputation is arguably second to none, and that’s allowed it to gain ground on its rival even in categories where the two have very similar products. 

In August, the Vanguard Total Bond Market ETF (BND) became the largest U.S.-listed bond ETF, eclipsing the iShares Core U.S. Aggregate Bond ETF (AGG).  

Today BND has nearly $80 billion in AUM, $2 billion more than AGG, even though they both have identical expense ratios (0.03%) and performance (-13.7%). 

Bottom Line  

For investors, competition between the two ETF giants is only a good thing. Fees will continue trending down, and iShares will probably launch a plethora of interesting products to keep the money flowing into its funds.  

With at least a few years to go before a potential regime change, the bottom line is this: Vanguard’s ascension to the No. 1 ETF issuer position is likely, but by no means guaranteed.  

 

Email Sumit Roy at [email protected] or follow him on Twitter @sumitroy2 

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