Source: FT.com
This was part of theme of my presentation this week — while equity markets in general have seen huge outflows, ETFs in general — and Vanguard in particular — have seen large inflows . . .
Category: ETFs, Investing, Mutual Funds
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
Could you elaborate on the huge outflows in general?
It looks like the ETF inflows are slightly larger than the mutual fund outflows.
Do these graphs compare apples and oranges? The bar graph on the left shows flows from EQUITY mutual funds but the circles on the right show flows into ALL exchange traded funds. How much of the flows can be explained by movement from equities to bonds?
Do these numbers include 401k plans, which often don’t offer ETFs as an option?
IIRC one thing that Vanguard did fairly early in the game was align their their ETF offerings with their mutual funds so that their holdings, advisers and fees were virtually identical, the only difference being a matter o f container and where you bought shares; from a brokerage (including Vanguard’s) or from the fund company directly.
Oh, the FT!
I cannot take away more than a little from this data, since I am not exactly sure of what I am seeing. I assume, but can only guess, that the headline writer meant to state: “Investors choose ETFs over mutual funds.” That would be meaningful.
If I take the headline at face value however, it would infer that the data displayed is showing an investor preference for the entire universe of ETFs, (both active and passive) as compared to the (admittedly large) subset of mutual funds that are actively managed.
That however would be analogous to (and little more useful than) stating that “sales of both black and silver BMWs are up, but sales of silver Audis are down.”
Question, does all this passive index growth cause stocks to become more and more correlated together? If SPY for example grow to 80% of the outstanding stocks…doesn’t that mean there’s very little ability to pick individual stocks for performance?
Vanguard doesn;t charge for trading ETF’s, but if you trade out of mutual funds, you can’t reenter that fund for 2 months.
https://personal.vanguard.com/us/whatweoffer/stocksbondscds/feescommissions