Malvern’s Vanguard Group has blown by its competitors to claim bragging rights to the world’s largest equity mutual fund and bond fund, and it is rocketing into uncharted asset inflow territory, but that incredible trajectory has also made industry experts a little nervous about what dangers could be lurking in the stratosphere.

“It is phenomenal that a single company could represent almost 20 percent of the U.S. mutual fund industry,” Morningstar Analyst Michael Rawson said in a recent RIA Biz report that outlined the uncomfortable risks of becoming too big to fail.

With asset inflows on pace to hit $300 billion this year, Vanguard is leaving its 2014 record $215 billion in the dust, and its hot-commodity target date funds have quickly amassed nearly a third of the market, RIA Biz acknowledged.

But the news source also highlighted concerns illuminated by the Financial Times about government regulations driving up fund fees, passive investments falling out of favor in a bear market, friction between Vanguard’s signature index funds and a fast-rising Personal Advisor Services, and the threat of G-20 Financial Stability Board labels and government intervention.

“[Vanguard CEO Bill] McNabb wrote that after the financial crisis, governments ‘took steps to ensure that Main Street would not be on the hook — again — for bad bets placed by Wall Street. Now regulators might place that burden squarely back on Main Street mutual-fund investors without any solid evidence that the funds or their managers could bring on another panic.’”

And the very novelty of Vanguard’s not-for-profit business structure both explains its success and removes all other apples from a fair comparison.

“If you’re running a public company, you and your shareholders are paying a lot of attention to the profit margin,” McNabb said in the article. “What’s an appropriate margin? Is it 40 percent in our business or is it 35 percent or 25 percent? I don’t know the answer to that. I don’t have to worry about it.”

Read more about the analysis of Vanguard’s weaknesses in RIA Biz here, and check out previous VISTA Today coverage of the mutual fund giant here.