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Money Management

Vanguard isn’t taking in as much money; neither is anyone else

Pedestrians outside the New York Stock Exchange. So-so returns on the stock market have crimped fund flows.

Vanguard Group is attracting a lot less money from investors this year compared with 2017. Turns out, the mutual fund giant's not alone.

Vanguard, the world's second-largest money manager, collected $138 billion in the first half of 2018, down from $237 billion in the same period a year ago, according to the firm. That's a decline of 42%. By comparison, total U.S. fund flows — money going into exchange-traded, active and passive mutual funds — fell roughly 50%, according to Bloomberg estimates.

"At first glance it looks like Vanguard is having an off-year, but relatively speaking their dominance is still intact," said Eric Balchunas, senior ETF analyst with Bloomberg Intelligence.

The reason for the drop-off in overall flows? The so-so performance of the stock market, said Mr. Balchunas, who points out that there is a strong correlation between market returns and fund flows. The S&P 500 index rose 2.7% in this year's first half compared with 9.3% in the first six months of last year.