Vanguard managed the most money in 401(k)-type retirement plans last year, passing longtime leader Fidelity Investments.
Vanguard had $613.5 billion in defined contribution assets as of Dec. 31, compared with $612.4 billion for Fidelity, according to Pensions & Investments, a trade publication.
A year earlier, Fidelity managed $523.9 billion, while Vanguard had $479.6 billion.
People who sponsor retirement plans are finding low-cost index funds a compelling value, and that has been a boon for us, said Chris McIsaac, managing director at Vanguard.
Funds that mimic indexes have grown in popularity as investors have become skeptical about the ability of stock pickers to beat the market averages.
As the firm most associated with indexing, Vanguard has ridden the wave to become the largest player in the U.S. mutual fund business.
Americans held $5.9 trillion in defined-contribution plans as of Dec. 31, according to the Investment Company Institute. The most common type are 401(k)s, which have steadily expanded over the past three decades.
The plans require workers to manage their own savings, in contrast to traditional pensions that made monthly payouts to retirees from money managed by employers.
Vanguard had $2 trillion in U.S. mutual-fund assets as of April 30, compared with $1.2 trillion for Boston-based Fidelity, which is known for its active style of money management, according to data from Chicago-based Morningstar.
In the first four months of 2014, U.S. equity index funds attracted $30.4 billion in deposits, while actively managed funds suffered redemptions of $5.9 billion, Morningstar data show.