Vanguard’s Rise To No. 2 ETF Firm Matters

August 19, 2014

The ongoing rise of Vanguard in the world of ETFs is a story that keeps giving investors a lot to cheer about.

We’ve long been expecting Vanguard, the low-cost pioneer in the fund industry, to pass State Street Global Advisors to become the second-biggest ETF sponsor, and now it’s just about a done deal.

As the table below shows, the company John Bogle built now has about $390 billion in ETF assets, or just $4 billion less than SSgA, the company that brought the first U.S. exchange-traded fund to market 21 years ago. One day of sizable outflows from that fund, the SPDR S&P 500 ETF (SPY | A-98) the world’s biggest ETF, would probably do it. So go ahead and hold your breath.

Top 20 ETF Sponsors By Assets
12-Aug 2103 2012 2011 2010
BlackRock 717,842 661,587 558,014 448,342 447,602
SSgA 395,911 391,572 329,181 266,467 246,949
Vanguard 390,789 333,777 244,433 169,993 147,925
Invesco PowerShares 101,928 97,595 71,024 57,621 54,022
WisdomTree 34,974 34,884 18,286 12,182 9,891
First Trust 28,153 19,715 8,189 6,271 5,425
Guggenheim 27,417 22,052 12,378 3,069 3,549
ProShares 27,116 27,275 21,147 23,107 23,567
Van Eck 24,586 22,181 27,669 24,269 20,001
Charles Schwab 22,176 16,896 8,553 5,034 2,722
Pimco 14,304 13,277 9,103 3,994 2,168
ALPS 11,301 8,758 4,677 2,103 705
Barclays Capital 8,557 8,185 5,794 6,291 8,530
Northern Trust 8,519 6,740 2,294 483 -
Direxion 8,170 6,778 5,938 6,671 6,580
JPMorgan 6,727 5,863 4,883 3,655 2,286
UBS 5,027 3,995 1,475 931 627
Global X 4,280 2,840 1,512 1,144 1,294
ETF Securities 3,039 2,947 4,072 3,486 3,522
US Commodity Funds 2,428 2,084 3,140 2,886 4,962

To be clear, ETF.com reporting on this change in the ETF League Table and interpreting what it all means isn’t about acknowledging bragging rights for Vanguard.

Nor is this a screed about how SSgA may have squandered a first-to-market advantage. SSgA is a perfectly credible ETF company, with some cutting-edge moves recently. Those include the rollout of a lineup of “Quality Mix” factor-focused ETFs as well as the launch of the now $605 million SPDR Blackstone / GSO Senior Loan ETF (SRLN | B), making it one of the most successful active ETF rollouts ever.

Instead, the reason we should all celebrate the rise of Vanguard and the rise of Vanguard ETFs is because it shows that investors are truly getting a fair shake. And it’s important to take measure of how Vanguard is spreading its influence throughout the world of money management.

Since its first ETF, the Vanguard Total Stock Market ETF (VTI | A-100), came to market in 2001, the company has steadily been climbing the ETF League Tables, even as its legacy open-end mutual fund franchise has continued to build assets.

 

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