(Bloomberg) -- Vanguard Group keeps getting more dominant.
The biggest U.S. mutual fund company attracted almost $29 billion to its long-term mutual funds and exchange-traded funds in March, more than all of its competitors combined, according to a report Thursday by Morningstar Inc. Vanguard, which built its reputation on low fees, was the leader in estimated flows to both actively managed funds as well as those that track indexes, also its specialty.
“Investors are becoming more sensitive to costs and active managers in general haven’t performed well,” said Alina Lamy, an analyst at Morningstar.
The shift toward passive investing has accelerated since the 2008 financial crisis. While the move happened first with stock funds, more recently it has picked up speed on the bond side. In the taxable-bond category, a record 27 percent of the money in mutual funds and ETFs was run passively at the end of March, up from 20 percent at the end of 2013, Morningstar data show.
Vanguard’s collections in March represented 59 percent of the money the entire industry gathered during the month. BlackRock Inc.’s iShares unit attracted almost $15 billion to its ETFs. Firms including Pacific Investment Management Co. and Franklin Resources Inc. experienced fund net redemptions during the month, according to Morningstar’s estimates.
Vanguard’s $24.7 billion Intermediate-Term Investment Grade Fund had the largest inflow, more than $1.6 billion, to any active fund in March, Morningstar reported. About $1 trillion of the $3.2 trillion Vanguard oversees is in actively run funds. Vanguard is based in Valley Forge, Pennsylvania.
To contact the reporter on this story: Charles Stein in Boston at [email protected] To contact the editors responsible for this story: Christian Baumgaertel at [email protected] Josh Friedman, Vincent Bielski