Record Inflows Help Global ETF Assets Reach $4.3 Trillion, With BlackRock Leading The Way

by Trefis Team
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The strong run witnessed by the global exchange-traded fund (ETF) industry over recent years received an additional boost from upbeat market conditions in the second quarter of the 2017 – helping it scale a record high of nearly $4.3 trillion in assets by the end of July 2017. In addition to the ongoing trend of investors shifting to low-cost ETFs from actively-managed funds, the industry’s fortunes brightened considerably as the Department of Labor’s Fiduciary Rule went into effect in early June.

As seen over the years, retail and institutional investors continue to favor the three largest ETF providers (BlackRock, Vanguard and State Street), as evidenced by the fact that they together manage 70% of all ETF assets in the world. This represents almost $3 trillion in assets under management for these three companies globally – a figure that is roughly the same as the total size of assets under management for all U.S.-listed ETFs combined.

Source: Global ETF assets by issuer (ETFGI)

ETFs have 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 an even more attractive investment option for retail investors. Despite being the largest player in the industry since its nascent days, BlackRock’s iShares business continues to grow at unprecedented rates. The asset management giant reported record net inflows of $138 billion over the first half of 2017, with almost $74 billion in fresh cash being pumped by investors into its ETF offerings over the second quarter.

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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