Vanguard’s lead in stopping the bleed of redemptions is no fluke. Ever since it was founded by index investing icon John Bogle, the fund company has attracted advisers and investors who seek the gains of the capital markets by pursuing disciplined portfolio strategies that focus on broad diversification with low-cost and transparent investment vehicles.
Market timers and stock pickers are out of place at Vanguard get togethers, so their panic, frustration, and fatalism in tough times do not get much of a hearing.
As the first to turn around the grim redemption figures from the market meltdown, Vanguard is living up to its name:
Vanguard:
1. the leading units moving at the head of an army
2. any creative group active in the innovation and application of new concepts and techniques in a given field (especially in the arts) [syn: avant-garde]
3. the position of greatest importance or advancement; the leading position in any movement or field
Vanguard Leads the Way for Fund Companies
Investors slowed their redemptions but still took out a net $41 billion in November following a gargantuan $111 billion in October redemptions, according to flow estimates from Morningstar Market Intelligence.
Vanguard was one of the few big fund companies to move back into the black with net inflows of $2.1 billion, compared with net outflows of $5 billion in October. The firm’s Treasury funds likely helped as they remained strong amid a flight to quality. Others enjoying nice modest inflows were John Hancock, Eaton Vance, FPA, and TIAA-CREF.
Among the giant shops, Fidelity shed $3 billion, but that’s a big improvement from the $18 billion in net outflows from October. However, giant American had the greatest net outflows to the tune of $7 billion, compared with net outflows of $16 billion in October.
Filed under: Market meltdown learning opportunities | Tagged: American, Fidelity, redemption, vanguard
