3 Fast Growing ETF Issuers

December 09, 2015

Assets invested in the U.S. ETF market have grown by about 7% year-to-date—a pace that reflects more than $200 billion in ETF creations in 2015, and muted market action, which has the S&P 500 practically flat on the year. But the growth among some ETF issuers is far bigger than that.

Total U.S.-listed ETF assets are now hovering at $2.150 trillion versus $2.006 trillion at the end of 2014.

Some of the biggest ETF issuers have only gotten bigger: BlackRock today manages more than $827 billion in ETF assets—8.7% more than it did last December. Vanguard, too, has seen its asset base grow more than 13% in the same period to $483 billion, taking State Street Global Advisor’s No. 2 spot. SSgA actually saw assets decline by 8.1% this year.

The three biggest firms still command more than 80% of the total ETF market even if newcomer issuers enter the market almost every month. But here are some standout asset gatherers in the ETF industry this year:

Deutsche Bank: Assets Under Management Up 425%

The firm has seen its ETF AUM grow by 425% year-to-date. Coming into 2015 with less than $4.5 billion in total assets, Deutsche today manages more than $21.7 billion.

That impressive jump rests largely on the success of one strategy: the Deutsche X-trackers MSCI EAFE Hedged Equity ETF (DBEF | B-72). DBEF was one of the two most popular ETFs this year, gathering nearly $13 billion in fresh net assets year-to-date. The fund’s asset base also benefited from positive performance, even with the late summer correction, as the chart below shows:

DBEF offers exposure to eurozone equities while peeling away the exposure to the currency crosses. That strategy is a popular play for investors looking to capture value in eurozone equities while mitigating the impact a strong dollar has on returns.

Deutsche brought some 12 new ETFs to market this year.

Goldman Sachs: Assets Under Management Up 218%

For ETF investors, Goldman Sachs Asset Management came into 2015 as a small sponsor of exchange-traded notes with about $170 million in AUM in these strategies. Today the firm has nearly $550 million in AUM tied to a growing roster of ETFs it launched this year. That’s a 218% growth rate year-to-date.

GSAM’s entry into the ETF space was particularly noteworthy because it brought to market smart-beta ETFs at unprecedented low expense ratios. The Goldman Sachs Active Beta US Large Cap Equity ETF (GSLC) and the Goldman Sachs ActiveBeta Emerging Markets Equity ETF (GEM) charge 0.09% and 0.45% in expense ratio, respectively.

In an interview with ETF.com at the time of the launches, Michael Crinieri, global head of ETF strategy for GSAM, said the firm’s ETFs were a response to customer demand. Clearly, that demand is materializing.

WisdomTree: Assets Under Management Up 54%

Coming into 2015, WisdomTree—the only publicly traded ETF company in the U.S.—had ETF assets of about $39 billion. Today the firm is nearing $60 billion.

A lot of that growth has come thanks to WisdomTree’s focus on currency-hedged strategies. In 2014, the firm’s WisdomTree Japan Hedged Equity (DXJ | B-74) made headlines by raking in more than $10 billion in a matter of months as investors bought into Japan’s economic growth story without having to worry about the strength of the dollar.

This year, the WisdomTree Europe Hedged Equity ETF (HEDJ | B-49) has gathered the most assets for the firm. HEDJ is, in fact, the most popular ETF this year, gathering more than $15.4 billion in new assets year-to-date. Like competing DBEF, HEDJ’s popularity is tied to demand for eurozone equities while mitigating the impact a strong dollar has on international stock returns.

Compared to an unhedged strategy such as the iShares MSCI EMU (EZU | A-83), it’s easy to see the appeal of HEDJ’s performance this year, as the chart below shows:

Charts courtesy of StockCharts.com


Contact Cinthia Murphy at [email protected].

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