Once again, the media is looking at which fund firm is the top dog based on assets under management. Reuters notes that when ETFs are excluded from the tally, Fidelity is No. 1, but if ETFs are part of the calculation, Vanguard is the tops.

"Excluding ETFs from the count would be like not counting the Prius in Toyota sales figures because it is a hybrid," Vanguard spokesman John Woerth told Reuters, in response to comments made last week by Fidelity president Rodger Lawson that Fidelity has cornered 12.4 percent of the mutual fund market at the end of June.

According to Strategic Insight's Loren Fox, when the count includes ETFs, Vanguard's fund AUM totaled $1.19 trillion at the end of July, while Fidelity had $1.17 trillion.

But the AUM is only half the equation. As fund industry insiders are well aware, at the end of the day, it's all about profits, which are driven by revenues, which, in turn, are driven by two things: AUM and fund price.

Vanguard is the industry's Wal-Mart, while Fidelity is Costco. Also, Fidelity does no use sub-advisors, so management fees stay within its walls. 

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