New launches of exchange-traded funds at Vanguard and the hiring of more wholehave created excitement for the products among investors, and that is the primary reason the funds have taken in $15.1 billion in inflows so far this year, compared to flows of $8.6 billion the year prior, Thomas Rampulla, director of sales in the financial advisory business, told Reuters.
“The investment we made over the last several years in the business is beginning to pay off. We are close to a 100% growth over last year in net flows,” he said. At this point, Vanguard, whose ETF market share is only 6% to 7%, is taking in 18% to 20% of all ETF inflows, Rampulla said.
Daniel Wiener, editor of the Independent Adviser for Vanguard Investors, said he expects ETF sales to become increasingly important for Vanguard. “There’s no question that [ETFs] is the big growth area for them,” Wiener said.
Vanguard launched six new ETFs this year, all taking in significant amounts of month. An ETF based on the FTSE All-World (ex-U.S.) index reaped $1.1 billion, four bond ETFs attracted a combined $1.3 billion and one based on an MSCI index took in $500 million.
Although Vanguard is planning to launch a bond ETF, unlike competitors, it is exercising restraint in the products it is launching, Rampulla said. “There will be a few more products, but you won’t see dozens and dozens of products. We are getting pretty close of a very solid line-up,” he said.
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