Vanguard continues momentum in global ETF market
Vanguard | 17 December 2014
Vanguard reported today that it continued to see strong adoption in 2014 of its exchange-traded funds (ETFs) in the United States, Canada, Europe, Australia, Asia, and elsewhere around the world. The firm reported global ETF cash flow of more than $75 billion at the end of November and total global ETF assets of more than $442 billion.
"Vanguard's value proposition is not confined by geographic boundaries," said Vanguard Chief Investment Officer Tim Buckley. "It's gratifying to see our low-cost, high-quality approach to investing resonating so strongly with investors around the world. We will continue to seek to drive down the cost of investing for the clients whom we serve around the world."
Highlights for 2014 include:
Vanguard Australia had more than $2 billion ($2.5 billion AUD) in ETF assets under management through November. The firm recently launched two new international ETFs: Vanguard MSCI Index International Shares ETF (ASX: VGS) and Vanguard MSCI Index International Shares (hedged) ETF (ASX: VGAD), bringing to 12 the number of ETFs it offers Australian investors and advisors. With expense ratios of 0.18% and 0.21%, respectively, the funds are among the lowest-cost, locally managed international equity product offerings in the market. Vanguard Australia was awarded Best ETF Provider at both the Money Management/Lonsec Fund Manager of the Year Awards and Money Magazine's Best of the Best awards.
Cash flow continues to be strong in Vanguard's line-up of 67 U.S.-based ETFs, with investors entrusting $63.5 billion to the firm year-to-date through November 2014. (Vanguard had $55 billion in cash flow into its U.S.-based ETFs in calendar-year 2013.) (source: Bloomberg). Total U.S. Vanguard ETF assets closed November with $422.5 billion.
Additionally, Vanguard reported lower expense ratios on 22 ETFs over the past year, including reductions for some of its largest and most popular ETFs: the $48 billion Vanguard Emerging Markets ETF (ticker: VWO) (from 0.18% to 0.15%) and the $24 billion Vanguard FTSE Developed Markets ETF (ticker: VEA) (from 0.10% to 0.09%).
Vanguard Asset Management was second out of more than 50 European ETF providers in terms of cash flow year-to-date through November. Vanguard finished the month with $14.2 billion (€11.4 billion) in ETF assets under management.
The company launched four new equity ETFs in October and now offers 13 ETFs in the United Kingdom and Europe. The ongoing costs for Vanguard's European ETF suite now range from 0.07% to 0.29%, compared with an industry average of 0.35% (Source: ETFGI). The firm also lowered charges on 25 U.K. and Irish-domiciled index mutual funds and ETFs during the year.
Vanguard Investments Canada Inc. had more than $3 billion ($3.5 billion CAD) in ETF assets under management though November. It concluded its third year of operations in Canada, during which the firm launched five new exchange-traded funds (ETFs) and lowered management fees on more than half of its current line-up of 21 ETFs. Additionally, in November of this year, Vanguard Investments Canada Inc. was recognised as Morningstar's ETF Provider of the Year-Canada for the second straight year.
Vanguard Investments Hong Kong expanded its product offering in June with three new Hong Kong-domiciled ETFs. The firm introduced its first ETF in May 2013 and finished November with $55 million in ETF assets ($426 million HKD). Each of Vanguard's Hong Kong-domiciled ETFs has the lowest expense ratio in the market for its category, with total expense ratios ranging from 0.25% to 0.45%. The Hong Kong office serves as the Asian hub for the company, which established a site in Japan in 2000 and in Singapore in 2003.
All asset figures are as of 30 November 2014, unless otherwise stated.