An industry record $236 billion flowed into Vanguard mutual funds in 2015, as the Malvern, Pennsylvania investment giant founded by passive investment pioneer Jack Bogle continued to benefit from investors’ redemptions from actively managed investment strategies.
It was the largest flow of assets ever to a single management company, eclipsing the record Vanguard set in 2014, when its funds attracted $214.5 billion in assets, according to reporting in the Wall Street Journal.
A representative from Morningstar says its analysts won’t have Vanguard’s total 2015 numbers for several more days, but that the data it has through November 2015 validates the Journal’s reporting.
Morningstar says that through November 2015, Vanguard’s open-ended mutual funds and ETFs had attracted $206 billion of flows.
That total does not include money market funds or assets in target date funds.
Not counting ETF assets, $140 billion were attracted to Vanguard funds through November of last year. That is more than the next 10 largest fund families’ flows into mutual funds combined.
Vanguard also was able to separate from the rest of the industry visa via its 401(k) record keeping business and its target date series.
A Morningstar representative said about $32 billion had flowed into the firm’s target date funds by the end of last November, giving Vanguard about 30 percent of the target date market, as it continued to distance itself from Fidelity and T. Rowe Price, which round out out the top three TDF providers.
By comparison, T. Rowe Price recorded about $9.6 billion of flows into its TDF series through the end of November 2015, while Fidelity experienced $5 billion in outflows, according to Morningstar’s data.
JP Morgan saw the second highest flows into its TDF series through last November, with $9.7 billion moving into its lineup.
Vanguard's take in the TDF market was nothing short of dominant. Through November, it had attracted more in TDF assets than the next top five providers combined.
Vanguard’s total TDF assets were $225.4 billion; Fidelity’s total TDF assets were $184.4 billion; T. Row Price’s total TDF assets were $133.4 through November 2015.
Vanguard’s overall 2015 performance suggests fees remain top of mind for more retail and 401(k) investors.
The Morningstar rep said the average industry-wide expense ratio for all mutual funds is 130 basis points.
Vanguard’s average is 19 basis points, the rep said.
Total U.S. assets under management rose to $3.1 trillion in 2015, according to reporting in the Wall Street Journal.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
