Vanguard has become a towering figure in the world of exchange-traded funds (ETFs).
As investors increasingly turn to ETFs for their diversification, lower costs, and liquidity, understanding the offerings and strategies of major players like Vanguard is essential.
Yet, amidst this expansive array of financial instruments, one notable absence in Vanguard’s portfolio raises eyebrows: the lack of a Bitcoin ETF.
Here, we delve into the five critical factors about Vanguard ETFs, also explaining why a Bitcoin ETF is deliberately missing from their portfolio lineup.
Vanguard’s Status In The ETF Arena
Vanguard ranks as the second-largest ETF issuer globally, overseeing a diverse portfolio of over a hundred ETFs and boasting an impressive $2.5 trillion in assets under management (AUM), just shy of BlackRock Inc. BLK, which leads with $2.7 trillion AUM.
The Vanguard S&P 500 ETF VOO, with $426 billion in AUM as of Mar. 14, 2024, is not only Vanguard’s flagship fund but also the world’s second-largest ETF, trailing slightly behind the SPDR S&P 500 ETF Trust SPY at $503 billion.
Top 7 Vanguard’s ETFs By AUM
| ETF | AUM (bn) |
|---|---|
| Vanguard S&P 500 ETF | 426.87 |
| Vanguard Total Stock Market ETF | 385.48 |
| Vanguard FTSE Developed Markets ETF VEA | 130.07 |
| Vanguard Growth ETF VUG | 119.81 |
| Vanguard Value ETF VTV | 115.14 |
| Vanguard Total Bond Market ETF BND | 105.94 |
| Vanguard Div Appreciation ETF VIG | 77.92 |
Champion of Low Fees
In the competitive ETF marketplace, cost efficiency is a significant battleground. Vanguard emerges as a victor here, offering the lowest average expense fees among its funds—an AUM-weighted average expense ratio of a mere 0.05%, according to data from VettaFi.
| Issuers | Expense Rank | Avg. Expense Ratio (%) |
| Vanguard | 1 | 0.05% |
| BNY Mellon | 2 | 0.05% |
| Charles Schwab | 3 | 0.08% |
| Bondbloxx Investment Management Corp. | 4 | 0.10% |
| GAMCO Investors, Inc. | 5 | 0.11% |
| Humankind USA LLC | 6 | 0.11% |
| State Street | 7 | 0.12% |
| Deutsche Bank AG | 8 | 0.13% |
| Goldman Sachs | 9 | 0.15% |
The cheapest ETFs issued by Vanguard are the Vanguard S&P 500 ETF, Vanguard Total Stock Market ETF VTI, and the Vanguard Total Bond Market ETF, all screening an expense ratio of just 0.03%.
Leading The 2024 Inflow Race
In 2024, Vanguard outshines its competitors in attracting investment flows. The issuer has seen a staggering $75 billion in inflows over the past three months, eclipsing BlackRock’s $55.7 billion, thereby securing its position as the top performer in fund flows thus far this year.
The Vanguard S&P 500 ETF has attracted $21 billion over the past three months, topping the ranking among its peers.
| Issuers | Fund Flow Rank | 3-Month Fund Flow ($MM) |
| Vanguard | 1 | $70,097.57 |
| BlackRock, Inc. | 2 | $55,791.59 |
| Invesco | 3 | $20,380.07 |
| State Street | 4 | $16,097.65 |
| Dimensional | 5 | $9,362.99 |
| JPMorgan Chase | 6 | $9,263.38 |
| Fidelity | 7 | $9,240.89 |
A Conservative Product Range
Unlike some of its peers, Vanguard has opted for a more conservative route in its ETF offerings. The company does not offer leveraged ETFs, sticking strictly to equity and fixed-income products.
This strategic choice highlights Vanguard’s focus on traditional investment vehicles over speculative or alternative assets. Vanguard’s portfolio notably lacks any commodities, currency, or Bitcoin-related ETFs.
Absence of Bitcoin and Crypto ETFs
This absence isn’t due to oversight but a deliberate decision. Vanguard has explicitly stated it has no plans to introduce a Bitcoin ETF or any other crypto-related products, distinguishing itself from other major ETF issuers — such as BlackRock, VanEck, Franklin Templeton, WisdomTree, Invesco, Fidelity, Global X, 21 Shares and ProShares – who have embraced the crypto bandwagon.
Why No Bitcoin ETF? Vanguard’s Reasoning
Vanguard’s stance on Bitcoin and cryptocurrencies is grounded in a cautious approach to investment merit and client needs. Janel Jackson, global head of ETF Capital Markets and broker & index relations at Vanguard, has expressed skepticism about the role of cryptocurrencies in long-term portfolios.
Citing crypto’s speculative nature, lack of inherent economic value, and potential to disrupt portfolio stability, Vanguard sees crypto as an “immature asset class.”
Instead, the company invests its interest in blockchain technology for its potential to enhance capital market efficiency, steering clear of cryptocurrencies as investment products.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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