The flip comes despite BlackRocks attempts to lure investors to its bond funds. The asset manager cut fees on AGG to 0.03% from 0.04% in April to match BNDs expense ratio. It also lowered costs on two other fixed-income ETFs in January, countering similar moves from State Street Corp. and Vanguard.
Fixed income ETFs have experienced enormous growth since iShares introduced them 20 years ago and are now fundamental to how investors of all types access and trade the fixed income markets, a BlackRock spokesperson wrote in an email. Despite the most challenging fixed-income environment in many decades, iShares is leading the industry in fixed-income ETF inflows with over $62 billion so far this year, more than twice the nearest competitor.
But Vanguards dominance extends down the leaderboard. While BlackRock still has the most fixed-income ETF assets under management, four of the top five largest funds are Vanguard products.
AGG has seen its assets drop after entering the year with over $92 billion, but BND has stayed approximately the same size amid a turbulent market. Despite both ETFs posting comparable returns, investors have poured roughly $8.2 billion into BND and have yanked nearly $100 million from AGG this year, according to Bloomberg data.
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