How The Big 3 ETF Issuers Got So Big

August 09, 2017

[This article appears in our September 2017 issue of ETF Report.]

iShares. Vanguard. State Street. The three largest ETF issuers, which together account for 82% of all assets, are so often spoken about in the same breath, you'd be forgiven for assuming they were a single (albeit awkwardly named) company.

Yes, the Big Three share many similarities: ultra-cheap "core" ETFs; rock-solid track records; and oceans of liquidity. Yet each issuer has its own particular quirks and market niche. State Street has seniority. Vanguard has low-cost diversification. iShares has the sheer, staggering weight of numbers.

Over the years, dozens of ETF issuers have come and gone, but the Big Three remain, their shadows looming large over the industry. Where iShares, Vanguard and State Street go, so too does everybody else (see Figure 1).

This is their story. 

 

 

State Street Global Advisors
Total AUM: $546B
Market Share: 18%

In the beginning, there was State Street.

State Street Global Advisors (SSGA) is the investment arm of State Street Corporation, the world's third-largest asset manager. It's also the third-largest ETF issuer, with $546 billion in assets under management (AUM) across 131 funds.

SSGA was first to market with ETFs: In 1993, it launched the very first ETF, the SPDR S&P 500 ETF (SPY), which also continues to be the world's largest. The margin isn't even close: SPY has $242 billion in assets, compared with $121 billion for its next nearest competitor, the iShares Core S&P 500 ETF (IVV).

SSGA also launched several other industry firsts: the first sector funds, the Select Sector SPDRs, in 1998; and the first physical gold ETF, the SPDR Gold Trust (GLD), in 2004.

 

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