The Wall Street Journal: Vanguard assets top $4 trillion mark for first time

Indexing pioneer Vanguard Group has climbed to $ 4 trillion in assets for the first time, accentuating a loss of faith among investors in traditional money managers who handpick stocks.

The record of $ 4.048 trillion, reached at the end of January, follows a year when Vanguard’s funds pulled in more new money than all of its competitors combined, according to one industry total.

Of the $ 533 billion of net flows into all mutual funds and exchange-traded funds last year, 54%, or $ 289 billion, went to funds managed by Vanguard, according to research firm Morningstar Inc. The fund company’s own tally for the year was even higher, at $ 322.8 billion.

The rush to Vanguard is largely the result of a push to embrace funds that mimic broad indexes for a fraction of the cost of traditional actively managed mutual funds. Vanguard, which started the first index mutual fund for individual investors 40 years ago, is No. 2 in the asset-management world behind New York–based BlackRock Inc. BLK, +1.14% , another money-management giant benefiting from shifting investor tastes.

An expanded version of this report appears at WSJ.com.

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MarketWatch.com – Financial Services Industry News

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