U.S.-listed ETF assets have grown about 23% year to date to $4.2 trillion thanks to a combination of strong net asset inflows and market performance. That pace of growth has been pretty steady in recent years, but it hasn’t been evenly distributed among ETF issuers.
The most recent ETF Issuer League Table—our compilation of where issuers rank in total ETF assets under management—shows a few interesting things this year.
1. Same Top 3 Remain At Top
So far in 2019, the three firms at the top saw combined AUM grow nearly $670 billion. That amounts to about 85% of all the growth—tied to flows and performance—seen this year in the U.S. ETF industry. In other words, of every $1 of new growth the ETF market enjoyed in 2019, $0.85 was at the hands of three issuers.
What’s more, about half that combined growth was in BlackRock’s iShares ETFs alone, which today command $1.64 trillion of all assets tied to U.S.-listed ETFs. That’s just over a third of the entire ETF market.
BlackRock’s dominance is old news, and still uncontested. But when you are a giant, it takes a lot more to move the needle. From a percentage growth perspective, despite stellar results, BlackRock’s footprint increased exactly the same as the broader ETF market in 2019: 23%.
No. 2 issuer Vanguard, which crossed the $1 trillion-in-assets line this year, grew its ETF presence by 28% so far this year, while State Street Global Advisors—once the second largest issuer and the pioneer behind strategies such as the SPDR S&P 500 ETF Trust (SPY) and the SPDR Gold Trust (GLD)—saw its asset base grow about $109 billion in 2019 to $677 billion in total assets, a 19% jump from where it stood at the end of 2018.
None of these numbers is particularly surprising. State Street has some of the most used and traded ETFs in the market, but BlackRock has done a phenomenal job of reducing fees through lineups such as the “Core” ETFs and innovating with the “Evolve” family of funds, attracting new assets. Vanguard, meanwhile, has retained its position at the helm of low-cost passive investing with a steady hand and a strong following.
It’s hard to imagine what could dethrone these firms’ leadership.
2. Big Banks Showing Serious Muscle In The ETF Business
Big asset managers like J.P. Morgan and Goldman Sachs are still relatively young in the ETF game, but they aren’t goofing around.
J.P. Morgan is already the 10th largest ETF issuer in the U.S., with $31 billion in total assets. So far in 2019, the firm saw its ETF asset base grow a strong 55%. Yes, in dollar terms we are talking about roughly only $11 billion in net new money, but a 55% growth rate in one year is nothing to scoff at.
With 34 ETFs on the market today, J.P. Morgan is behind $8 billion-plus strategies already, such as the $9.8 billion JPMorgan Ultra-Short Income ETF (JPST) and the $4.5 billion JPMorgan BetaBuilders Japan ETF (BBJP), among others.
Goldman Sachs, meanwhile, has expanded its footprint in the ETF market this year by a whopping 62%. The firm behind 22 ETFs now commands about $16.2 billion in total assets, putting it at the No. 12 spot in the issuer ranking—up four spots from last year.
The Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC) is now a $7 billion fund, the asset manager’s largest. Goldman’s focus on low-cost, competitive offerings has worked well, as has its sizable in-house asset base—something firms like these have been able to tap into to quickly grow their ETF businesses.