All good things must come to an end — even for Vanguard, which has enjoyed success in recent years riding the passive and TDF waves. In June the company experienced its first month of net redemptions in nearly 20 years, dating back to December 1994.
Though the loss was a modest $100 million, Vanguard saw redemptions of $9.7 billion in bonds — part of a broader trend of $60 billion in bond redemptions last month, the largest since 1961, according to ICI. PIMCO, the world's largest active fixed-income manager, experienced $14.5 billion in net redemptions as part of this trend, which was spurred by the Fed’s suggestion in May that it might start reducing bond purchases, causing yields to climb to 2.61% from 1.93%.
