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

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7 Responses to “Investors Continue to Pick ETFs over Active Funds”

  1. wcvarones says:

    Could you elaborate on the huge outflows in general?

    It looks like the ETF inflows are slightly larger than the mutual fund outflows.

  2. Planner22 says:

    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?

  3. GeorgeBurnsWasRight says:

    Do these numbers include 401k plans, which often don’t offer ETFs as an option?

  4. RW says:

    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.

  5. J Kraus says:

    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.”

  6. changja says:

    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?

  7. and3togo4 says:

    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.