Vanguard Group this year is again on pace to beat BlackRock when it comes to exchange-traded fund net inflows, but 2022 could be different as institutional investors further their embrace of ETFs, according to independent research firm CFRA.
While Vanguard is poised to “overwhelmingly be the industry leader” in ETF inflows for this year, CFRA believes that BlackRock’s “exposure to the institutional marketplace could be a catalyst in 2022,” Todd Rosenbluth, head of ETF and mutual fund research at Charlottesville, Va.-based CFRA, said in an interview Tuesday.
Institutions have been embracing ETFs “because of the growing liquidity that they provide,” Mr. Rosenbluth said in the interview, which followed the release of a CFRA report.
“CFRA expects that as institutional investors further embrace ETFs in 2022, the strong liquidity of some of BlackRock’s largest funds will have added appeal to help it be positioned to recapture its flows leadership,” the report said.
According to the report, the ETF division of BlackRock, home of iShares, had $180 billion of net inflows this year through Nov. 30, which was 1.5 times the amount it took in for all of 2020. BlackRock’s inflows during the first 11 months of this year helped push its industry-leading asset base to $2.4 trillion, the report said.
BlackRock’s haul, however, was eclipsed by Vanguard, which has ETF assets totaling $2 trillion, the report said. Vanguard netted slightly more than $300 billion of new money this year through Nov. 30, also 1.5 times its 2020 net inflows, CFRA’s report said.
Vanguard benefited from having six funds among the top-10 most purchased and by avoiding meaningful redemptions, the report said. By comparison, BlackRock ETFs had 14 of the industry’s 20 highest redemptions this year through Nov. 30, with those funds collectively seeing $50 billion in net outflows. Vanguard had no ETF in the top 20 for redemptions, the report said.
In 2020, Vanguard ETFs netted $200 billion, eclipsing BlackRock’s $122 billion of net inflows that year, Mr. Rosenbluth said.
“Vanguard is focused on investors’ outcomes, not cash flow league tables,” Rich Powers, head of index and ETF product management at Vanguard, said in a statement Tuesday. “While we’re gratified that investors have entrusted their assets to Vanguard ETFs in record numbers in 2021, this is simply an affirmation of the value we deliver to our clients and the trust they place in us.”