Vanguard Canada AUM: Way above trend …

Typically, when commenting on growth in the Canadian ETF space, the longer term growth rate stands at anywhere between 20-25% year after year.

Looking at Vanguard, the 3rd largest provider in Canada from Oct 2020 to Oct 2021, that growth rate has been spectacularly surpassed: +64.8% y/o/y overall.

Long term industry observers will recall that any significant disruption generally sees the ETF industry go from strength to strength. The COVID-19 pandemic doesn’t look to have been any different, no matter how many time you may have read that “now, finally, it was going to be a market for active managers …”.

Well, as you know, Vanguard specializes in “passive” ETFs (for the most part, making abstraction of their Actively managed solutions – read what others label “factors”). And passive, notwithstanding Canada’s world leading share of Active solutions in the ETF space, is doing just fine gauging by these numbers:

Y/O/Y, the fixed income category at Vanguard saw AUM grow 16.3% (that of course would include the negative returns performance generated by the asset class recently …), while Equities grew 73.9%, and Asset allocation solutions 110.8%. One ticket “solutions”, in other words are of the hyper growth category for Vanguard.

Slicing through these One ticket solutions ETFs, flows were definitely tilted toward the growth side of the equation (read equities), with all equities growing 241%, followed by growth at 107.7%, Balanced at 76.5%; and Conservative / Income (at 55.7%, respectively 38.2%). Ahead of all of this (but off of a meaningfully lower starting base), the most recent addition: the 4% withdrawal product, which grew 419.4% (from $63M to $328M as at Oct 31, 2021).

Overall, this is what Vanguard’s AUM breakdown looks like, October 2021 versus October 2022:

       

Oh, and in passing, I am keeping an eye on how much $ one could deem Vanguard as having saved Canadians based on the latest AUM numbers. Effectively, with an AUM weighted MER of some 16 bps, versus recent 223 bps for the Mutual funds space, Vanguard is well through saving Canadians $900M in fees (currently closer to $950M), a number that likely will exceed the $ 1 Bio mark within the next year barring any unexpected developments (sizeable market setback, respectively significant slowdown in AUM growth relative to history).