Another ‘amazing’ year for Vanguard - Morningstar

Finish lineVanguard once again dominated worldwide fund flows last year while Pimco suffered the largest outflows, research from Morningstar shows.

US asset management giant Vanguard took in an additional $143 billion (€103 billion) in 2013 and now manages a total of $2.3 trillion in long-term mutual fund and exchange-traded fund (ETF) assets.

Pimco, also a US asset manager, suffered outflows of $29 billion last year, having previously benefited from a long bull market in bonds.

Morningstar says fears of rising interest rates led to this withdrawal of assets from bond funds. Pimco was hit hard because 88% of its assets are invested in bond funds.

Overall, bond funds attracted $134 billion of new money in 2013, down from $602 billion in the previous year.

Because of Vanguard’s cost-conscious business strategy, Morningstar concluded that no one should be surprised that “Vanguard had another amazing year”.

Some 71% of Vanguard's assets are invested in index strategies, where scale helps to spread fixed costs. Vanguard says it passes savings on to its investors.

Vanguard is the largest branding name by long-term assets under management, followed by Fidelity, American Funds, iShares, Pimco, Franklin Templeton, BlackRock, State Street, T. Rowe Price and JP Morgan.

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