MutualFundWire.com: $1T Versus $13.94B

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Friday, September 4, 2020

$1T Versus $13.94B

For the first time, there's now a trillion-dollar fund (or strategy, really). And there's also a new active ETF champion.

Gerard "Gerry" C. O'Reilly
Vanguard
Principal, Portfolio Manager

As anticipated back in February, before the coronavirus crisis took hold in the U.S., Vanguard's Total Stock Market Index strategy crossed the $1-trillion-AUM line yesterday, reaching $1.016 trillion, Barron's reports. That includes $975 billion in five mutual fund share classes and an ETF, plus two institutional fund share classes powered by the same team and strategy. That's up more than 11 fold in the past twelve years: the strategy held $90 billion in 2008, mid-financial crisis.

The strategy has seen net inflows every since its 1992 launch, Barron's notes. Yet 2020 is, at least so far, an exception: it suffered an estimated $13 billion in net outflows in the first eight months of 2020. (The publication notes that Vanguard's massive target-date funds, both their inflows and their rebalancing, have had a sizable impact on the Total Stock Market Index strategy.)

"There were pretty substantial flows going back and forth this year," Gerry O'Reilly, PM of the strategy, tells Barron's.

Oh, and if the Vanguard Total Stock Market Index strategy were its own fund family, it would be the fifth biggest in the U.S. by AUM (not counting money market funds).

That massive Vanguard strategy dwarfs (by a couple orders of magnitude) the new giant in the active ETF side of the business. Bloomberg reports that the three-year-old JPMorgan Ultra-Short Income ETF (JPST) recently became the biggest active ETF, with $13.94 billion in AUM (out of $39 billion total in J.P. Morgan's 31-fund, six-year-old ETF business). (It passed the 11-year-old PIMCO Enhanced Short Maturity Active ETF (MINT), which has $13.88 billion.)

"JPMorgan was relatively late to crash the ETF party, but they have used their scale and strong brand to climb the leader board with both low-cost asset allocation based and actively managed fixed income ETF products," Todd Rosenbluth, head of ETF and mutual fund research at CFRA Research, tells Bloomberg. "JPST has barely turned three years old and has become a go-to strategy for cash management."

JPST has gained $3.7 billion in net inflows so far in 2020.

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