the dominant players in the world of ETFs

ETFs are a highly demanded investment instrument within passive management, since they integrate the advantages of mutual funds and stocks. And if there are two leading companies in the world that supply this product, they are Blackrock y Vanguard. The former firm manages $9.5 trillion in assets under management, while the latter has $7.9 trillion.

Although Blackrock has the most assets under management, the growth rates benefit Vanguard. If we talk specifically about ETF’s, their assets grow by 17% annualized in the last 5 years in the case of Vanguard, while Blackrock advances by 12%.

They both sell similar products. For example, in the case of the US stock market index S&P500, the aim is to replicate the investment results of this index and Vanguard offers the product Vanguard 500 Index Fund ETF (VOO), while Blackrock supplies the iShares Core S&P ETF (IVV).

On the surface, these ETFs are almost identical, although there are slight differences between them. For example, each ETF owns about current charges of 0.03%, which is an exception given the high fees associated with some investment funds that do index management. Getting to this point has seen stiff competition with Blackrock lowering its commissions to match Vanguard.

If we talk about assets there are already some differences. The IVV has more assets under management with 326,250 million dollars, compared to 272,970 million of VOO.

However, if we move closer to the fixed income environment, Vanguard has managed to position its fixed income ETF as the largest bond exchange-traded fund in the world. The Vanguard Total Bond Market ETF (BND), with assets of approximately $83.8 billion, has surpassed the $83.2 billion iShares Core US Aggregate Bond ETF (AGG).

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What has happened is that despite both ETFs posting similar returns, BDN has raised $8.2 billion and in the AGG have withdrawn almost 100 million.

Vanguard has yet to overtake Blackrock in assets, but Vanguard’s dominance extends down the ladder. While BlackRock still has the most fixed income ETF assets under management, four of the five largest funds are now Vanguard products.


Source: El Blog Salmón by www.elblogsalmon.com.

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