Low cost investing has won another battle in another key channel, reports Bloomberg
Charles Stein and Margaret Collins report that, according to Pensions & Investments
had $613.5 billion in defined contribution assets as of Dec. 31, while Fidelity
managed $612.4 billion. In comparison, Fido a year earlier managed $523.9 billion, and Vanguard managed $479.6 billion.
According to the article, one of the drivers behind Vanguard's success was the growing popularity of its target-date funds, now a crucial offering for retirement investing.
Although Vanguard's lead is small, just over $1 billion, it demonstrates that the strategy of offering basement price investment offerings is starting to negate some of the marketing advantages recordkeepers have in pushing mutual funds.
The fact that Fido has an enormous, well-funded, well-developed RK-ing complex (indeed, it remains tops in 401(k)-type recordkeeping assets with about $1.4 trillion as of March 31, according to Bloomberg
) has been a key sales advantage for the Behemoth in the past of course.
Nothing beats the captive relationship between an asset manager and sponsors/participants that serving as the fund gatekeeper. At least until now.
This isn't the only example of Vanguard upending tried-and-true rules in a channel. For example, the low cost giant is trying to shake up the advisor space with a low cost advise service
Again, Vanguard's lead over Fido is slender, but it's growth has been significant. Lovers of the RK-path to investors hearts may have to rethink this particular love song.
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