It appears that one major investor called it quits on every single one of Vanguard’s popular ETFs tracking U.S. economic sectors.
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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
A combined $1.8 billion came out of all 11 of Vanguard’s sector ETFs this week, with the outflows being triggered by individual block trades scattered between 12 p.m. and 1 p.m. ET on Monday, suggesting it was one seller. Among the largest outflows was the Vanguard Information Technology ETF (VGT), which lost $430 million in assets, and the Vanguard Real Estate ETF (VNQ), which had $217 million pulled from the fund.
Vanguard is the second-largest issuer of ETFs in the U.S. Its $868 billion worth of funds make up about 26% of the industry’s assets, according to data compiled by Bloomberg Intelligence.
While the large-cap focused sector funds offered by State Street’s SPDR ETFs have more assets and trade more frequently, Vanguard’s are popular because they have lower expense ratios, said Todd Rosenbluth, director of ETF research at CFRA Research.
“This may have to do with year-end tax planning purposes or a shift away from sector investing,” Rosenbluth said. “The performance gap this year between sectors suggests more investors might benefit from using them tactically. But of course, getting the call wrong can be detrimental.”
