Worst H1 Outflows for Vanguard Active Funds

Vanguard saw more money leave its actively managed mutual funds in the first half of the year than ever before, according to news reports.

During the first six months of 2022, investors pulled $54.3 billion from Vanguard’s 71 active mutual funds, FA-IQ sister publication Ignites writes, citing Morningstar Direct. That was the worst first half of the year since 1993, the year Vanguard’s database dates back to, according to the publication.

Around half of the outflows hit just five of Vanguard’s mutual funds, including the $46 billion International Bond Index Fund, which saw $24.1 billion pulled, and the $73.4 billion Intermediate-Term Tax-Exempt Fund, which shed $9.93 billion, Ignites writes, citing the database.

During the same period, Vanguard saw $3.1 billion in net inflows into its passive mutual funds, which had $3.2 trillion in assets as of the end of June, while the fund provider’s $1.8 trillion exchange traded fund lineup saw a $103.2 billion boost, according to the Morningstar Direct data cited by the publication.

A Vanguard spokesperson declined comment to Ignites.

The massive outflows are in part due to Vanguard being one of the largest active mutual fund providers, said Daniel Wiener, chairman of Adviser Investments and editor of the Independent Adviser for Vanguard Investors, according to the publication. Vanguard is third, after American Funds and Fidelity, by assets in active mutual funds, Ignites writes, citing Morningstar.

Active mutual funds overall saw $454.2 billion in redemptions in the first six months of 2022, with Vanguard, Fidelity, Pimco, Franklin Templeton and T. Rowe Price — which saw the largest net outflows from their active funds — recording $164.6 billion in net redemptions, according to Morningstar data cited by the publication.

Only five of the 50 largest active mutual fund providers saw net inflows during the period, Ignites found in a recent analysis.

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