ETF Inflows Boost Vanguard’s Chances to Overtake BlackRock

Vanguard saw the most outflows of any active fund issuer during the first half of the year, but it still saw significant inflows to its U.S.-listed ETF lineup—putting it on track to eventually overtake BlackRock as the largest ETF issuer in the U.S. 

Recent data from Morningstar highlighted Vanguard’s U.S. lineup of 71 active mutual funds, which saw more than $54 billion in outflows during the first half of 2022—the most for any fund complex in its database dating back to 1993—according to a Financial Times article published on Aug. 14. 

What’s astonishing about that is that Vanguard’s entire U.S. product offering—which includes passive as well as active mutual funds, ETFs and other products—gained $77.1 billion during the same time period, which is also the worst first half for U.S. stock performance since 1970. 

Vanguard wasn’t alone in its active mutual funds’ losses. Active mutual funds saw $454.2 billion in outflows, according to Morningstar data, with major firms like Fidelity, Pimco, Franklin Templeton and T. Rowe Price leading the pack in addition to Vanguard. 

During the same time period, Vanguard’s U.S.-listed ETFs pulled in $103.2 billion, Morningstar’s data shows, contributing significantly to the firm’s aggregate inflows despite the dismal performance of the world’s largest stock market.  

The largest contributor was the Vanguard S&P 500 ETF (VOO), which pulled in $25.5 billion, followed by the Vanguard Value ETF (VTV) with $12.8 billion and the Vanguard Total Stock Market ETF (VTI) with $12.6 billion.  

As a result of its solid ETF inflows, Vanguard has been steadily closing the gap with largest U.S. ETF issuer rival, BlackRock, during the last few years. A little more than $300 billion currently separates the two issuers. For each of the last few years, Vanguard has been narrowing that space by about $100 billion. 

Contact Heather Bell at [email protected]