The three largest ETF managers have decided not to join a new trade association designed to promote the $1.2 trillion business, potentially weakening the group’s influence.

BlackRock, Vanguard and State Street are not part of the National Exchange Traded Funds Association, or NETFA, which was unveiled last month.

The three firms dominate the ETF business. At the end of April, BlackRock controlled assets of $498.8 billion, State Street had $295.9 billion and Vanguard managed $208.9 billion, according to data from the ETF Industry Association.

“The F in ETF stands for ‘fund,'” said Joel Dickson, senior ETF strategist for Vanguard, in a Barron’s story this weekend. “To separate ETFs from other fund-industry issues, to us, runs a huge risk of negating many of the protections and disclosures that have been in place for 70 years.”

Jim Ross, head of the ETF business at State Street Global Advisors, told Barron’s his firm won’t be joining NETFA. He currently serves as chair of the ETF committee for the Investment Company Institute, the largest trade group for the mutual fund business.

John Hyland is NEFTA chairman while Adam Patti serves as vice-chairman. Hyland is the chief investment officer of U.S. Commodity Funds LLC, which manages commodity ETFs. Patti is chief executive of ETF provider IndexIQ. [ETF Firms Create National Trade Association]

U.S. Commodity Funds had ETF assets of $3 billion at the end of April and IndexIQ held $226 million, according to ETF Industry Association data.

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