Digging under the hood, I think it’s interesting to see the kinds of funds these different groups use. For instance, the most-used funds by advisors and wealth managers probably aren’t a big surprise.
These top 10 lists show some of the largest ETFs in the market, as you would expect—industry giants like the SPDR S&P 500 ETF Trust (SPY) and the iShares Core US Aggregate Bond ETF (AGG). But there are some quirks here. Notice the big positions in both growth and value—the iShares Russell 1000 Value ETF (IWD) and the iShares Russell 1000 Growth ETF (IWF)—and the surprising popularity of the Vanguard REIT Index Fund (VNQ) fund with private banking clients. Style rotation is clearly alive and well in America’s biggest private banks.
The other thing to notice is just how large these positions are relative to the size of the funds. Between private wealth and the advisory market, well over half of a fund like the iShares MSCI EAFE ETF (EFA) is accounted for. The advisor market is clearly of huge importance to ETF issuers, and the switch from one product to another can be punishing.
Just notice what’s not on here: large positions in the iShares Emerging Markets ETF (EEM). EEM lost the crown for most popular emerging market ETF with advisors to Vanguard over the past decade, which is why you see the Vanguard Emerging Markets ETF (VWO) here instead.