Exchange traded fund industry assets are at about $1.3 trillion, with about 88% of this concentrated among the top four providers. BlackRock iShares, Vanguard, PowerShares and State Street Global Advisors are considered the largest ETF providers, with Market Vectors and WisdomTree right behind them.
“While Market Vectors and WisdomTree were among the smaller ETF providers to grow their asset bases, we think a look at the top four players and how each stacks up offers interesting insight,” S&P Capital wrote in a recent note. [Top of the Food Chain: A Look at the 5 Largest ETFs]
S&P Capital IQ used risk consideration, cost factor ranking inputs, S&P Quality rankings along with varied technical analysis to help give insight into some of the largest ETF providers around. [Seven ETFs to Watch in 2013]
- Vanguard: The provider ranks #1 for overall “Overweight” ranked ETFs and #1 in risk considerations and cost factors. Vanguard offers 52 equity ETFs, the least of the other three heavyweight providers. The average expense ratio for their funds is 0.17%, one of the leaders in the ongoing low-cost fee war. The recent move by Vanguard to change benchmarks this year could impact the overall standing for the firm. Vanguard Dividend Appreciation (NYSEArca: VIG) and the Vanguard Pacific Stock Index Fund (NYSEArca: VPL) are both rated “Overweight” by the ratings company.
- BlackRock iShares: This provider comes in second for overall ranking, performance analytics and risk considerations. The firm is the industry leader for assets under management, with 207 equity ETFS trading. The average expense ratio is 0.46%, more than SSGA and Vanguard. An “Overweight” ranked ETF is the iShares MSCI Global Energy Producers Fund (NYSEArca: FILL).
- State Street Global Advisors: As the pioneering ETF provider, the famous SPDR S&P 500 (NYSEArca: SPY) was the first ETF traded and is one of the most successful. The Spiders (SPDRs) line-up of ETFs has a large-cap focus and are generally sector and industry based. The average expense ratio is 0.38%.
- Invesco PowerShares: The provider is ranked 4th in the aforementioned categories, and has an average expense ratio of 0.80%. The low trading volume of many of PowerShare’s ETFs has been a weaker point for this line-up of funds but the rules-based approach to indexing has allowed the provider to create themes and niche type ETFs. The PowerShares S&P 500 Low-Volatility (NYSEArca: SPLV) and PowerShares KBW Bank Portfolio (NYSEArca: KBWB) are ranked “Overweight” by the ratings company. [ETF Investing Ideas for 2013]
Tisha Guerrero contributed to this article.
Full disclosure: Tom Lydon’s clients own SPY.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.