Throughout November, investors have allocated $ 133 billion in fixed-income assets from exchange-traded funds. This puts the ETFs in bonds at the forefront of the ETFs in equities. The positioning is on an annual basis and is the most serious of the dark days of the financial crisis.
The high cash flow to these ETFs brings significant benefits to two of the industry’s giants: BlackRock’s iShares and Vanguard.
“Vanguard has raised $ 91 billion in cash flow so far this year, with the fund’s market share already 34% after iShares, which is owned by BlackRock and has gained $ 98 billion or a 37% market share.” – Shares CFRA Research Director ETF & Mutual Fund Research Todd Rosenbluth.
By comparison, one of Vanguard’s lagging competitors is Charles Schwab, who has attracted flows for just $ 21 billion. The difference is significant.
Five of the top ten ETFs added new assets that were bonds: two Vanguard funds and three iShares. With its $ 10.33 billion so far, the Vanguard Total International Bond ETF is among the funds, indicating that US investors have an appetite for US bonds.
Backed by BNDX and BND, as well as iShares MBS (MBB), ETFs tied to the Bloomberg Index have raised $ 62 billion, most among index companies. In bond funds rather than equities, managers are more likely to fail to mention the provider of the index or the name of the investment product.
While iShares and Vanguard consolidate their positions as leading exchange-traded funds, there is still hope for other participants. Most notably among those most recognized as Goldman Sachs and JPMorgan Chase, two small but growing ETF players.
The Goldman Sachs ActiveBeta US Large Cap Equity ETF and JPMOrgan Ultra – Short Income ETF are among the 40 products with the highest cash flows for 2019.
Trader Martin Nikolov