It’s been a painful week for a clutch of ETFs run by Vanguard.
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Here’s how to prepare your clients, and your own practice, if dark days come and stay.
November 28 -
The firm anticipates the change will save its 1.5 million Admiral Shares clients roughly $71 million.
December 12 -
Treasury yields have fallen in response to tariffs imposed by the Trump administration, making defensive sector holdings more attractive.
July 3
Three of its bond ETFs lost a total of $1.4 billion in a single day as one large trader, Beacon Capital Management, decided to sell. The Vanguard Long-Term Bond ETF (BLV) saw its largest daily outflow on record as over $470 million drained away, data compiled by Bloomberg show. Short-term and intermediate-term debt funds also lost more than $400 million apiece.
Beacon is shifting back to 11 of Vanguard’s sector ETFs after volatility late last year prompted the firm to sell stock funds and hole-up in debt, according to Chris Cook, the firm’s president. The firm adheres to a rules-based strategy, and a 10% drop in its benchmark spurred the temporary move into debt ETFs, he said.
“We had taken more of a risk-off position in December, and those trades have reversed,” Cook said.
The average fee was nearly 20 basis points higher than the top-performer.
The S&P 500 touched an almost three-month high on Wednesday.
More than $1.3 billion of large block trades in the three funds crossed the tape between 10:38 a.m. and 10:46 a.m. in New York on Tuesday, data compiled by Bloomberg show. In addition to BLV, millions of shares traded in the Vanguard Intermediate-Term Bond ETF (BIV) and the Vanguard Short-Term Bond ETF (BSV) in a matter of minutes.
A spokesman for Vanguard declined to comment.
