It's another record for Vanguard Group.
The firm, which has grown to become the world's largest mutual fund manager by offering low-cost investments, attracted $148 billion in new client money during the first six months of 2016, surpassing its previous first-half record of $140 billion set last year, a spokesman said in an e-mail on Tuesday. In June alone, about $30 billion flooded into the firm's mutual funds and exchange-traded products.
The Valley Forge, Pennsylvania-based firm is benefiting from a growing preference for low-cost vehicles that track indexes as investors lose faith in the ability of active managers to beat the market. Vanguard has slashed fees to as low as 1 cent per $100 invested, and Chief Executive Officer Bill McNabb said he's prepared to cut further.
"Their cost advantage means if you're looking for low cost funds, they're pretty tough to beat — they're kind of the default answer in passive," Russel Kinnel, director of manager research at Chicago-based Morningstar Inc., said of Vanguard. "Their active funds have continued to be popular as well, a lot's going in their favor."
