Three Largest Players Have A 70% Market Share In $4 Trillion Global ETF Industry

The ongoing trend of investors shifting to low-cost exchange-traded funds (ETFs) from actively-managed funds helped the global ETF industry swell to a record size of $4 trillion by the end of April 2017. ^[1] And retail as well as institutional investors continue to favor the three largest ETF providers (BlackRock, Vanguard and State Street), as evidenced by the fact that they together now manage 70% of all ETF assets in the world. This represents a whopping $2.8 trillion in assets under management for these three companies globally – a figure that is equal to the total size of assets under management for all U.S.-listed ETFs taken together.

Source: Global ETF assets by issuer (ETFGI)

The ETF industry has seen impressive growth over the last decade, thanks to the convenience and transparency they provide investors. Over recent years, the intensifying competition among ETF providers has also triggered a price war among incumbents – making ETFs a more lucrative investment option for retail investors. Despite being the largest player in the industry since its nascent days, BlackRock continues to grow at a faster rate than any of its rivals. The asset management giant witnessed record inflows into its ETF offerings over the first four months of 2017, and looks poised to report massive growth in its ETF base yet again this year.

You can see how changes to BlackRock’s equity ETF assets (marketed under the iShares brand) affect our price estimate for the company by modifying the chart below.

See full Trefis analysis for BlackRock | State Street

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1. Global ETF assets reach $4tn, Financial Times, May 10 2017 [↩]