Five Largest ETF Providers Manage Almost 90% Of The $3 Trillion U.S. ETF Industry

by Trefis Team
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The five largest exchange-traded fund (ETF) providers – BlackRock, Vanguard, State Street, Invesco and Charles Schwab – have gradually increased their market share of the rapidly going ETF industry in the U.S. to over 89% by the end of Q2 2017.  Notably, the top 3 ETF providers dominate the market with a combined market share of 82% – a figure expected to continue to increase as BlackRock and Vanguard realize growth rates that are higher than the industry average. It should be noted here that the top-three players also account for more than 70% of all ETF assets globally.

Source: U.S. ETF assets by issuer (ETF.com)

The table below has been compiled from data gathered by ETF.com and captures the changes in U.S. ETF assets for the five 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 more than 35% over the last 12 months.

The fact that BlackRock and Vanguard achieved y-o-y growth rates of almost 40% is impressive given the sheer size of their asset bases. Both asset managers have done well thanks to their extremely low-cost core ETF segment targeted at retail investors. Additionally, improved valuations across debt and equity securities for Q2 2017 also boosted the value of their assets under management.

State Street stands out here, as it was the only asset manager to witness a y-o-y growth figure of less than 30%. We attribute this to State Street’s primary focus remaining on institutional investors even as the retail investment segment grows at a faster rate. The chart below captures State Street’s ETF assets under management. You can see how changes to State Street’s asset base affect our price estimate for the company by modifying the chart below.

See full Trefis analysis for BlackRock | State Street | Charles Schwab

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