Markets

$2 Billion Club: A Look At Most Popular Vanguard ETFs

Shutterstock photo

V anguard continues to lure ETF investors. Fourteen of its exchange traded funds absorbed more than $2 billion each in new investor money in the past year. Year to date through Aug. 31, Vanguard ETFs saw $49.2 billion in net inflow -- more than any other rival.

Vanguard was followed by iShares with $46.8 billion in net inflow,WisdomTree ( WETF ) with $20.8 billion, Deutsche X-trackers with $15.9 billion and First Trust with $9.2 billion, according to independent research firm ETFGI.

A focus on low costs has made Vanguard ETFs a popular choice for successful investing . On average, their ETFs cost 76% less than those from other companies. Plus, their bid-ask spread is typically a few pennies per share.

"Many investors like Vanguard and their consistent ethos of being low-cost or running their ETFs so the fees just cover their costs," said Deborah Fuhr, managing partner at ETFGI. "Paying lower fees helps your performance."

Plus, Vanguard's brokerage service, coupled with its global brand recognition and distribution, is helping them to gather net new assets.

"Vanguard has been assisting financial advisors, retail investors and institutions in being able to use ETFs," Fuhr said. "Users of their brokerage service do not pay commission when buying or selling Vanguard ETFs."

Here's a look at the three most popular Vanguard ETFs, in terms of net inflow over the past year:

S&P 500ETF ( VOO )

Total assets: $34.50 billion

Expense ratio: 0.05%

Yield: 2.09%

Index: Broadly diversified market-cap-weighted exposure to large U.S. stocks

Total stock holdings: 507

Top 5 holdings: Apple ( AAPL ),Microsoft ( MSFT ),Exxon Mobil ( XOM ),Johnson & Johnson (JNJ),Wells Fargo (WFC)

Assets in top 10 holdings: 16.9%

Year-to-date returns -3.75%

Noteworthy: VOO has the lowest expense ratio of any ETF tracking the S&P 500, according to Morningstar Inc.

Total Stock Market ETF (VTI)

Total assets: $53.42 billion

Expense ratio: 0.05%

Yield: 1.96%

Index: Covers the entire U.S. stock market

Total stock holdings: 3,812

Top 5 holdings: Apple, Microsoft, Exxon Mobil, Johnson & Johnson, Wells Fargo

Assets in top 10 holdings: 13.6%

Year-to-date returns: -3.47%

Noteworthy: VTO has the lowest cost of any ETF offering such a broad portfolio of U.S. stocks.

FTSE Developed Markets (VEA)

Total assets: $26.67 billion

Expense ratio: 0.09%

Yield: 3.07%

Index: Broad market-cap-weighted exposure to foreign developed market stocks

Total number of stock holdings: 1,357

Top 5 holdings: Nestle (NSRGY),Novartis (NVS),Roche Holding (RHHBY),HSBC Holdings (HSBC),Toyota Motor (TM)

Assets in top 10 holdings: 11.1%

Year-to-date returns: -0.58%

Noteworthy: VEA will enhance diversification by adding exposure to small-cap and Canadian stocks in the course of an index transition in late 2015.

VEA was tracking lower on the stock market today in late trade.

Follow Aparna Narayanan on Twitter @IBD_ANarayanan .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

MSFT XOM WETF AAPL VOO

Other Topics

ETFs