What Was The Market Share of The Top Five ETF Providers In The U.S. at The End of Q3?
The five largest exchange-traded fund (ETF) providers – BlackRock, Vanguard, State Street, Invesco and Charles Schwab – together manage 88% of all ETF assets in the U.S. Notably, the top-3 ETF providers account for 82% of the total figure.
Source: U.S. ETF assets by issuer (ETF.com)
The ETF industry continues to see impressive growth, and is a $3.5-trillion global industry now. The key factors that have helped ETFs attract cash from traditional mutual funds are the convenience and transparency they provide to 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 too.
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The table below has been compiled from data gathered by ETF.com and captures the change in U.S. ETF assets for 5 largest ETF providers in the country over the last five quarters.
As seen here, the total size of the U.S. ETF industry has swelled by almost 22% over the last 12 months. The two biggest players in the industry – BlackRock and Vanguard – witnessed growth faster than the industry thanks to strong inflows and improved market valuation. Both these players have gained from their focus on retail investors by slashing fees for core ETF offereings. On the other hand, State Street’s position has slipped steadily over recent years with investors switching to cheaper alternatives offered by competitors (especially Vanguard). That said, the industry as a whole saw a sizable increase in asset size in Q3 due to a sharp increase in valuation across debt as well as equity securities for the period.
You can see how changes to State Street’s ETF assets (marketed under the SPDR brand) affect our price estimate for the company by modifying the chart below.
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