ETF Trends
ETF Trends

This week’s larger inflows in VIG (Vanguard Dividend Appreciation, Expense Ratio 0.10%) which put the fund well above the $20 billion market in overall assets under management provide an opportunity to briefly survey the “Large Cap Value” Equity space in terms of some of the alternatives there.

With the most recent inflows, VIG is comfortably in the number two position in the ETF category, behind IWD (iShares Russell 1000 Value, Expense Ratio 0.21%, $25.5 billion in AUM). Some of the other largest funds in the category in order are VTV (Vanguard Value, Expense Ratio 0.09%, $17.8 billion in AUM), DVY (iShares DJ Select Dividend, Expense Ratio 0.40%, $14.9 billion in AUM), SDY (SPDR S&P Dividend, Expense Ratio 0.35%, $13.7 billion in AUM, and the well-known and long tenured DIA (SPDR DJ Industrial Average, Expense Ratio 0.17%, $11.9 billion in AUM).

VYM (Vanguard High Dividend Yield, Expense Ratio 0.10%) is also a member of the $10 billion plus club here with the previously mentioned funds in this fund category, with approximately $10.7 billion, so one key takeaway for the ETF investor or portfolio manager is the sheer asset heft that this category commands.

Clearly a popular broader category, as we see sixty three individually listed products ranging across design in the Large Cap Value Equity space currently, it is important to note that each fund is created differently here in terms of index design, methodology, and in some cases investment objective.

VIG for example along with VYM are “dividend” sensitive index approaches, also of the very low cost, beta/index nature, like all Vanguard funds. IWD on the other hand tracks a well-known Russell 1000 Value Index, and although not outright a “dividend” approach, the fund actually has a higher yield currently at 1.99% than VIG does (1.91%).

The category is not only relegated to Index approaches from the largest sponsors such as Vanguard, iShares, and SSGA, as we also see sponsors such as WisdomTree, PowerShares, Schwab, First Trust, ALPS, and Guggenheim all with at least one fund offering here above the $1 billion AUM mark.

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