Vanguard Adds $12B On Volatile Fed Hike Day

On a whipsaw day where the S&P 500 crossed the 0% intraday mark six times and the Federal Reserve raised rates for the first time since the start of the COVID-19 pandemic, approximately two-thirds of all net ETF flows went into one issuer’s coffers: Vanguard.

The world’s second-largest ETF issuer took in just over $12 billion of the approximately $18 billion in net inflows among U.S. ETFs on Wednesday, according to ETF.com data provider FactSet, and blew far past iShares and the rest of the largest ETF issuers on the day.

Seven of the 10 highest-gaining ETFs on Wednesday were Vanguard equity funds, with the Vanguard Total Stock Market ETF (VTI) alone adding $4.2 billion.

The results underscore the consistency with which Vanguard customers are putting money into the market despite the head winds and volatility that have gripped investor confidence in 2022.

Vanguard has become the default ETF provider of choice for advisors and institutions unless there’s a preexisting relationship with iShares or another issuer, said Toroso Investments Chief Investment Officer Michael Venuto.

“iShares ETFs are sold, but Vanguard ETFs are bought,” he said. “Vanguard has won the perception battle for trust and low cost.”

At this rate, Vanguard overtaking BlackRock as the world’s largest ETF issuer by assets within the next two years is a distinct possibility. BlackRock took that mantle in 2003 after surpassing State Street.

Vanguard is approximately $304 billion shy of BlackRock’s ETF asset total as of March 16. While that is a large number in any context, Vanguard is gaining rapidly, with year-to-date net inflows of $78.6 billion compared to BlackRock’s $18.8 billion.

Contact Dan Mika at [email protected], and follow him on Twitter