3 Fast Growing ETF Issuers

In the rapidly expanding ETF market, smaller issuers are growing the most.

Reviewed by: Cinthia Murphy
Edited by: Cinthia Murphy

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].

Cinthia Murphy is head of digital experience, advocating for the user in all that etf.com does. She previously served as managing editor and writer for etf.com, specializing in ETF content and multimedia. Cinthia’s experience includes time at Dow Jones and former BridgeNews, covering commodity futures markets in Chicago and Brazil equities in Sao Paulo. She has a bachelor’s degree in journalism from the University of Missouri-Columbia.