Bill McNabb, head of the $4.5tn asset management Vanguard, has shot down accusations that record breaking inflows into ETF's were helping inflate a stock market bubble.
The ETF industry has attracted almost $2.8tn in new business since the start of 2008, coinciding with one of the longest bull runs in US stock market history. His comments come as regulators globally are examining the potential risks of the explosive growth in the low-cost ETF industry. Investors ploughed nearly $400bn into ETFs in the first seven months of 2017, according to ETFGI, a London-based consultancy. “I don’t think what is happening in ETFs is systemic,” said Mr McNabb, who is stepping down as Vanguard’s chief executive at the end of the year but will remain chairman. “The concerns are more specific and idiosyncratic.”