As Vanguard continues to gather assets consider your exposure to the indexing herd. Sarah Krouse reports at The Wall Street Journal:
Of the $533 billion of net flows into all mutual funds and exchange-traded funds last year, 54%, or $289 billion, went to funds managed by Vanguard, according to research firm Morningstar Inc. The fund company’s own tally for the year was even higher, at $322.8 billion.
The rush to Vanguard is largely the result of a push to embrace funds that mimic broad indexes for a fraction of the cost of traditional actively managed mutual funds. Vanguard, which started the first index mutual fund for individual investors 40 years ago, is No. 2 in the asset-management world behind New York-based BlackRock Inc., another money-management giant benefiting from shifting investor tastes.
BlackRock topped $5 trillion in assets late last year for the first time. It has a larger international business than Vanguard.
Rival firms who have long been synonymous with their star pickers of stocks and bonds have been hurt by years of subpar performance and relatively high fees. Investors pulled a net $340.1 billion from U.S.-based actively managed funds last year, according to Morningstar, while pouring a record $504.8 billion into U.S.-based passively managed funds.
Read more here.