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What this trillion dollar manager looks at in the ETF market



Vanguard ETFs are officially $ 1 trillion dollars.

The investment giant's total assets for listed funds peaked that milestone this week, a major step for the company behind the most popular ETF in the market: Vanguard S&P 500 ETF, the ticker VOO.

Now, ETFs are 20% of Vangard's total wealth, which amounts to $ 5.6 trillion. ETFs also provided "around 35% of our cash flows over the last three years", more than any other ETF share class, said Rich Powers, ETF Product Management Manager Vanguard Monday at CNBC's "ETF Edge." [19659002] So far this year, the VOO has had about $ 1

0 billion in cash flows when investors try to secure their existing games or simply snag a bit of the pie, Powers said. With stocks high on record, Vanguard Total World Stock Index Fund ETF (VT) and Vanguard Total Bond Market Index Fund ETF (BND) also see increased interest, he said.

Vanguard responds to the enthusiasm by expanding the suite of investment options. Last year, the company launched six actively managed factor-based ETFs to accommodate investors looking for more targeted exposure, especially for value, speed, quality, liquidity and minimum volatility issues.

challenge? "Active [management] requires a track record," Powers said. "We are about 18 months in their lifecycle. It is another concept, and so there is a lot of education we do in teaching investors to invest with factors. It is not for all investors, but for some investors they want have very specific exposures. "

Exposure is becoming an increasingly hot topic in the ETF market with some high-capacity technology companies, including Amazon, which accounts for a large portion of certain funds and the broader market, and Powers also responded.

"The current weight of S&P [500] and the top 10 is really no different than it was for 10, … 15, 20 years ago. The constitutions are slightly different," Powers said. "If you were worried about that, you would go to a much broader fund and buy a worldwide ETF, where you keep the world market price, and reduce your exposure to the top 10."

VOO was less than 1% higher on Friday after touching a new 52-week high. VT and BND also increased by less than 1%.

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