How The Big 3 ETF Issuers Got So Big

August 29, 2017

AUM: $1.21T
Market Share : 40%

In this industry, big begets big. At $1.2 trillion in AUM, iShares is the biggest of the big. No other issuer even comes close.

As the ETF division of BlackRock, the world's largest asset manager, iShares started out of the gate with massive resources and economies of scale at its disposal.

Starting in 1996, iShares launched ETFs early and often, sometimes bringing dozens of funds to market in a given year. Today there are 343 iShares ETFs, or more than double the number offered by State Street and almost five times that offered by Vanguard (see Figure 4).




The relentless release cycle continues through today: Last year, iShares launched 23 funds; so far in 2017, it’s launched nine more.  And there are many more in various stages of registration.

iShares's lineup spans a vast breadth of investment objectives. Like State Street and Vanguard, iShares sells several extremely cheap "core" ETFs, like IVV and AGG. But it also offers hundreds of strategic and thematic plays, ranging from single-country funds to niche sector twists; from rate-hedged bond ETFs to smart-beta strategies. With apologies to Apple, the iShares motto could be: “There's an ETF for that.”

"Our scale allows us to deliver a wide range of products that help people invest in things they normally wouldn't be able to invest in on their own," said Ruth Weiss, head of the U.S. iShares Product Team at BlackRock. "We're constantly evaluating where we think investors, and the market, are going next."


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